Insurance and financial services group Momentum Metropolitan has advised shareholders it expects a rise in earnings for the year to June, thanks to a continued drop in life claims as the Covid-19 pandemic dissipates.
The Centurion-based group with a market cap of more than R28bn said “earnings were further supported by a strong improvement in investment variances because of favourable shifts in yield curves”.
Headline earnings per share (HEPS) are expected to rise 2%-7% to as much as 318c, the firm said in a trading update on Thursday. Normalised headline earnings per share are expected rise by 15%-20% when it releases its full-year results on September 13.
Momentum’s share price rose by as much as 5.7% to R20.38 by midmorning on the news.
The insurance sector has been in recovery since 2022 after harrowing 2020 and 2021 financial years which were marred by an upsurge in business and life claims.
Momentum said, however, that while earnings were up they were partially dampened by underwriting losses in Momentum Insure, deterioration in lapse experience in Metropolitan Life and a decline in investment return recognised on the group’s venture capital funds.
The group has also previously cautioned that economic activity continues to be hampered by rising interest rates, high inflation and load-shedding.
In May the company appointed Jeanette Marais as group CEO, making her SA’s first female leader of a large, listed life insurance and asset management group.
This came after the firm announced the retirement of former CEO Hilgard Pieter Meyer with effect from July 31.
Momentum has said it is gearing up to embark on a new strategy dubbed Beyond 2024, focusing on winning back market share in an economy characterised by low growth and a shrinking savings pool, which Marais will champion.
Mike Adsetts was appointed as Momentum Investment Management's new chief investment officer (CIO) with effect from July 1.
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