Insurance group MMI profit increases 12% on policy sales

Renee Bonorchis

MMI Holdings, South Africa’s third-largest insurer, said fiscal full-year profit climbed 12% after selling more policies and integrating units.

Net income rose to R2.59-billion in the 12 months through June, from R2.3-billion a year earlier, the Cape Town-based company said today in a statement. Earnings per share excluding one-time items rose 7% to R2.05, beating the R2.01 median estimate of five analysts surveyed by Bloomberg.

MMI, formed by the merger of Metropolitan Group and Momentum Group in 2010, also operates in 12 countries outside of South Africa. The company has been cutting costs in its home market for the past three years and is developing new insurance and health products for African markets, resulting in a 19% gain in new business to R711-million.

Growth in new business volumes will "remain dependent on the economic environment, including a recovery in employment and stronger disposable income levels" MMI said.

MMI is the worst-performing stock on the five-member FTSE/JSE Africa Life Assurer’s Index this year, gaining 3.3% compared with the average increase of 17%.

MMI increased its total dividend 12% to R1.27. – Bloomberg