MMI Holdings is a South Africa financial services group formed through the merger of insurance companies Metropolitan and Momentum in 2010. MMI Holdings shares were listed on the Johannesburg Stock Exchange (JSE) at the end of that year, becoming the third largest life insurer by market cap, at R26.7 billion.

The company’s offerings also include employee benefits, medical schemes, savings, investment, health risk management, asset management and rewards programmes, delivered to clients in 13 African countries. Through direct presence, joint ventures and strategic partnerships, MMI’s footprint has extended to Hong Kong, Singapore, the United Kingdom, Indonesia and India.

The group also has an extensive interest in the commercial property sector. Business is conducted through operating brands Momentum, Metropolitan, Multiply Wellness and Rewards, Hello Doctor, Carecross, Guardrisk and Eris Properties.

The group today has a JSE market cap of R37 billion and employs more than 17 000 staff.

The group has endured a rough ride in recent history, with MMI Holdings share price dropping from R34.21 at the beginning of 2015 to R24.08 by September 2016. Results have been impacted by a tough economic environment characterised by subdued markets and increased pressure on consumer income.

Despite this, the company achieved satisfactory financial data for the 2016 financial year. New business volumes grew by 35%, with particularly strong growth in thecorporate, public sector and international segments. Value of new business however declined by 11%, largely due to higher discount rates. Overall profits decreased from R2.9 billion to R2.1 billion, with the health, short-term insurance, Momentum Retail, Corporate and Public Sector and International segments all recording decreased profits or increased losses. Metropolitan Retail increased its profits from R604 million to R667 million.

The group has focused on reducing expenses and capital expenditure and implementing a more customer-centric business model, and still managed to declare slightly increased dividends (1%) for the year. Investors who buy MMI shares have experienced overall headline earnings losses

MMI Holdings does however have a strong capital buffer of R4 billion, which should help the group to withstand the tough forecast going forward.

Taking into account the economic outlook, MMI Holdings has increased its focus on efficiencies, but recognises that growth in new business volumes and profits will be impacted in the short to medium term. MMI shares have not been a popular buy for JSE investors, but the board has said it is confident that its strategies will facilitate long-term growth.

With MMI Holdings share price likely to continue on the downward trend on the live online stocks chart, investors will find it difficult to justify the purchase of MMI Holdings shares. This isn’t a particularly promising stock to buy at present.

Financials

Insurance

Life Insurance

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1. Start by Filling in the BUY THIS SHARE form.
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