Mixed bag of results in MMI update

FINANCIAL services group MMI Holdings on Friday released an operational update reflecting a decline in overall new business volumes by 7 percent on a present value of new business premiums (PVNBP) basis for the three months to end September.

The group attributed this decline to tough economic conditions and weak returns from equity markets. However, in the same quarter recurring premium new business was up 18 percent, while single premium new business was down 23 percent against a relatively demanding comparative for the first quarter of 2016.

MMI releases its year-end results at the end of June. The three months operational update reflects the first three months of financial year 2017.

“While external factors are putting some pressure on reported financial results, the group continues to make good progress with its new client centric operating model,” it said.

MMI Holdings operates five divisions: Momentum Retail, Metropolitan Retail, Corporate and Public Sector, International business and lastly Shareholder Capital. In the Momentum Retail new business, volumes were down 6 percent year-on-year and the group said this is mainly due to a 14 percent decline in single premium volumes.

The Metropolitan Retail continued to show the benefits arising from its distribution channel restructuring. Recurring premium new business is up 27 percent against first quarter of first quarter 2016, with protection business showing 33 percent growth.

New business for Corporate and Public Sector segment was down 21 percent compared with first quarter 2016 with single premium new business declined by 44 percent. International’s new business was up 1 percent yearon-year. Recurring premium new business was up 21 percent whereas single premium new business is down 73 percent.

Last month MMI and entered into a joint-venture agreement with Aditya Birla Financial Services Group in India by introducing Aditya Birla Health Insurance to the Indian market.

Rahima Cassim, an analyst at Ashburton Investments, said while overall new business volumes on a PVNBP basis were down 7 percent, the value of new business on a consistent basis had increase by 24 percent.”

MMI shares declined 2.09 percent to close at R21.55 on the JSE on Friday.