“MMI is investing in a number of growth initiatives, the benefits of which will only emerge in future reporting periods. The group has substantially completed the merger integration phase and has transformed from an integration focus to a growth focus,” the company said.
“A new client-centric operating model is being developed for MMI in order to capture growth opportunities in the fast-changing environment. The cumulative merger expense target of 500 million rand has been achieved ahead of the due date.”
The financial services group also reported that its total new business recurring premiums increased by 12 per cent for the nine months ending 31 March 2014 compared to the same period in 2013.
“Strong single premium inflows continued, ending 13 per cent higher than the comparative nine-months of the prior year – a period which included exceptional inflows in the employee benefits division,” [DATA MMI:MMI Holdings] said.
“The combined new business flows resulted in a 15 per cent increase in respect of the year-to-date present value of premiums (PVP) for MMI as a whole. This reflects the strength of the diverse distribution channels and the alignment of the comprehensive product offerings in the group with their respective target markets.”
MMI, which was formed from the merger of Metropolitan and Momentum, saw PVP for Momentum Retail increase by 21 per cent while PVP for Metropolitan Retail increased by three per cent.
“The markets in which Metropolitan Retail operate continue to be tough as increasing food and transport inflation erode available income. Recurring premium new business recovered well with the year-to-date total ending 11 per cent higher than March 2013,” said MMI.
“Single premiums continued to perform very well, delivering a 29 per cent increase for the nine-months ended 31 March 2014. The process and systems renewal projects are progressing well. Expenses were well managed during the period under review.”
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The company indicated that the acquisition of insurance company Cannon Assurance is awaiting regulatory approvals and that a number of growth and business process efficiency improvements are being implemented in the group.
“MMI is a well-diversified financial services group with scale in all the established operations. Merger synergies will continue to emerge as projects are completed. Cross-selling opportunities are being pursued across the group,” it said.
“Growth in new business volumes will, however, remain dependent on the economic environment, including a recovery in employment and stronger disposable income levels.”