FD Risto Ketola says ales volumes were excellent despite the economic and lockdown conditions.
Momentum Metropolitan Holdings has reported good operating results for the six months ended 31 December 2020, including impressive new business growth, signalling good progress with the turnaround strategy that was announced in 2018.
The group delivered normalised headline earnings of R1.012 million, which is a significant recovery from the loss of R251 million that was reported for the second half of the 2020 financial year. FD Risto Ketola attributes the recovery to improved sales volumes through a multitude of initiatives that are bearing fruit across different client segments.
The group reported a 14 percent increase in sales volumes to R30 billion and stated that the value of the new business more than doubled to R334 million.
Risto said that Momentum Metropolitan also continues to invest in its distribution capacity: “We are one of the only insurers to have increased our distribution headcount over the past few years, and we are taking a beyond Covid-19 view on this investment.”
He adds that the group’s normalised headline earnings were affected by a R364 million decrease in investment return – a year-on-year decline of 75 percent. “The decline in investment return was caused by a combination of factors, including lower yields on secure short-dated assets into which we invest the majority of our R13.5 billion shareholder investment portfolio, and a lower investable shareholder asset base following the R2 billion acquisition of Alexander Forbes Insurance in February 2020. To a large extent, the good operating performance compensated for the decrease in investment return.”
He explains that remote work and load shedding have not made it easy to deliver the service levels the company aspires to. “We need to make sure our service standards are improved.”