Momentum Metropolitan chief executive Hillie Meyer in a file photo. He said yesterday the new strategy would focus on growing existing channels, establish new channels, accelerate digital growth and will also focus on product and service leadership. Picture: Simphiwe Mbokazi, ANA.
Momentum Metropolitan chief executive Hillie Meyer in a file photo. He said yesterday the new strategy would focus on growing existing channels, establish new channels, accelerate digital growth and will also focus on product and service leadership. Picture: Simphiwe Mbokazi, ANA.

Momentum unveils new strategy to take it to 2024

By Sandile Mchunu Time of article published May 5, 2021

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MOMENTUM Metropolitan Holdings unveiled its new strategy during yesterday's investor conference presentation that will take the financial services group into the 2024 financial year, with an expected surge in normalised headline earnings despite the disruptions caused by Covid-19 in last year's results.

The new strategy, “Reinvent and Grow”, will run from 2022 to 2024 and the group has targeted to achieve normalised headline earnings growth of R5 billion by 2024 and it has targeted a return on equity (RoE) of 20 percent.

Addressing the investor conference yesterday, chief executive Hillie Meyer said the new strategy would focus on growing existing channels, establish new channels, accelerate digital growth and will also focus on product and service leadership.

“The target for financial year 2024 is to reach normalised headline earnings of R5bn, and that will reflect a growth of 39 percent from the financial year 2021 normalised headline earnings which is expected to be between R3.2bn and R3.6bn.

The group will achieve the growth by accelerating our digital channels, moving away from a contact led business to a fully digital services led business,” Meyer said.

During the financial year to end June 2020, the group reported an RoE of 7 percent and this is expected to increase to between 15 and 17 percent for financial year 2021 before achieving the targeted 20 percent in 2024.

The new strategy replaces the “Reset and Grow” implemented in 2018 that targeted to reach between R3.6bn and R4bn in normalised headline earnings by the year 2021.

However, the Covid-19 outbreak in March last year derailed the group's progress as it reported a 51 percent decline to R1.52 billion for the year to end June 2020, hurt by a R251 million loss on additional provisions that were made, and a net negative impact of R983m for potentially adverse claims and policyholder lapses and withdrawals related to the Covid-19 pandemic.

However, the group bounced back strongly in the first quarter of the 2021 financial year by reporting an 18 percent increase in normalised headline earnings to R1.04bn, with operating profit up by 61 percent to R846 million and value of new business increasing by 6 percent to R106m.

Looking ahead, the group had set growth targets for different divisions that would enable it to achieve the 2024 earnings targets.

In the Momentum Investments segment, earnings were expected to increase by 7 percent and non-life business had been set a growth of 50 percent by 2024.

The group has other divisions such as Momentum Life, Metropolitan Life, Momentum Corporate, Momentum Metropolitan Health and Momentum Metropolitan Africa.

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BUSINESS REPORT ONLINE

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