21 Nov 2024
Surge in New Business Premiums and Strategic Underwriting Actions Drive Positive Growth Across Key Markets
Momentum Group’s Africa division posted strong earnings for the three months ending Sept. 30, driven by a lower claims ratio and favorable investment returns, particularly in Namibia, the company said in an operational update.
Rising costs partially offset the positive results, the group noted.
The group reported that mortality experience across Africa remained in line with expectations in most countries.
The present value of new business premiums (PVNBP) increased 25% to N$870 million, primarily due to higher retail sales in Namibia and Botswana and stronger corporate sales in Lesotho. However, the gains were partially offset by a decline in retail sales in Lesotho and lower corporate sales in Botswana and Namibia.
“Although negative N$9 million, the Value of New Business (VNB) improved and was mainly supported by higher VNB in Lesotho, partially offset by a decline in Namibia’s VNB, while Botswana remained flat,” the group said.
Momentum attributed its operational performance to strong new business results from most units.
From an earnings perspective, most business units delivered encouraging results, supported by favorable moves in key economic indicators, the company stated. However, it cautioned that it is too early to report a significant shift in trends.
The group’s PVNBP sales rose 5% year-on-year to N$20.7 billion, driven by growth in life annuities and new business volumes from Momentum Investments. Africa’s PVNBP surged 25%, led by retail sales growth in Namibia and Botswana and higher corporate sales in Lesotho.
Assets under administration (AUA) on the Momentum Wealth Investment Platform increased 17% to N$280 billion, supported by positive net flows and favorable market performance.
Momentum also noted improvements in assets under management and administration across both its multi-manager and single-manager businesses, bolstered by robust growth in its local institutional platform.
In its Health segment, growth in fee income—primarily from lower-margin products—and increased interest income contributed to higher earnings.
Momentum Insure delivered an encouraging performance, aided by an improved combined ratio and higher investment income. The claims ratio fell below the long-term target range of 58% to 62%.
“This strong performance was primarily driven by the ongoing positive effect of premium increases outpacing claims inflation, strategic underwriting actions implemented in the 2024 financial year to address higher claims frequencies, and a better-than-expected weather claims experience,” the group stated.