Momentum Group exceeded its R7 billion earnings target a year early after stronger operating performances across most of its businesses lifted normalised headline earnings by 13% to R7.06bn for the year to the end of June 2026.
Although new-business sales increased strongly, the value generated from that business remains an area of concern.
Momentum said advice remained a key differentiator, while its business-unit results include changes to distribution, adviser productivity, product mix, and new-business profitability.
Operating profit increased by 9% to R5.97bn, while market variances fell by 67% to R186 million. Investment returns on shareholders’ funds rose by 40% to R1.09bn.
Momentum’s measure of market variance includes both investment variances and changes in economic assumptions. Momentum Retail recorded a negative market variance of R320m after the group reduced its ultimate spot-rate assumption from 10% to 9.3% following the announcement of the lower inflation target. Momentum said Retail was affected most because of the long-dated cash flows in its protection business.
Momentum group chief executive Jeanette Marais said stronger operational performance across most business units, combined with market impacts playing a smaller role, indicated that the quality of earnings had improved.
“Not only is every single business profitable, but five of our businesses each delivered earnings of more than R1bn for the year,” she said in a statement on 17 September 2026.
The businesses were Momentum Retail, Momentum Investments, Metropolitan Life, Momentum Corporate, and Guardrisk. The latter three reached the milestone earlier than planned under the group’s Impact strategy.
Headline earnings per share increased by 18% to 528.7 cents, while normalised headline earnings per share rose by the same percentage to 530 cents. Return on equity increased from 21.2% to 21.7%.
New-business value lags the increase in sales
New-business sales, measured by the present value of new business premiums, increased by 18% to R93.8bn. Momentum noted that the growth in PVNBP benefited from the lower opening yields used in the discounting applied compared with the previous year.
Value of new business increased by 5%, from R469m to R491m, while the new-business margin declined from 0.6% to 0.5%. Momentum described VNB as its “main area of concern” and said the margin remained below its Impact strategy ambition, mainly because of lower life-annuity sales volumes across the industry.
The value of onerous contracts declined by 39% from R570m to R349m, with the largest reductions reported by Momentum Investments and Metropolitan Life. These are contracts on which expected outflows exceed expected inflows when they are first recognised.
Momentum’s presentation said VNB improved year on year in all its businesses except Momentum Investments. Metropolitan Life returned to positive VNB, while the losses reported by Momentum Corporate and Momentum Africa narrowed. Lower demand for guaranteed annuities weighed on Momentum Investments’ new-business value.
Marais said sustaining the group’s earnings trajectory would mean “sharpening our focus on VNB and growing sales volumes and market share in profitable products”.
Metropolitan improves new-business value despite lower sales
Metropolitan Life’s new-business sales declined by 14% to R5.6bn, while the insurer continued a channel-optimisation project that resulted in a smaller but more effective agency sales force. Momentum said similar attention was required to improve the quality of new business generated through Metropolitan’s telesales and broker channels.
Momentum Group’s results presentation showed that, between FY2024 and FY2026, Metropolitan Life’s sales footprint decreased by 33% and its tied agency force was reduced by 42%, yet sales declined by 19% over the same period, while adviser productivity increased from 2.8 to 3.7 policies a week.
Despite the lower sales volumes, Metropolitan’s VNB improved from a loss of R13m to a profit of R60m, and its new-business margin recovered from negative 0.2% to 1.1%.
Momentum attributed the improvement to a more profitable business mix, disciplined expense management, better-quality new business, distribution cost savings from the optimisation project, and fewer early-duration lapses. It said the margin nevertheless remained below its medium-term expectations for Metropolitan.
Metropolitan’s normalised headline earnings increased by 32% to R1.15bn, supported by fewer onerous contracts, favourable mortality experience, positive assumption changes, disciplined expense management, and a data-reserve release following the completion of its system migration.
Momentum Insure invests in broker capability
Momentum Insure increased normalised headline earnings by 8% to R474m, despite a 2% decline in insurance revenue in what Momentum described as a competitive market.
Its claims ratio improved from 51% to 47%, supported by lower weather-related losses, continued underwriting discipline, and the initial benefits of claims-procurement cost optimisation. The expense ratio increased from 39% to 41%, largely because of weaker premium growth and continued investment in growth initiatives and marketing. The combined ratio nevertheless improved from 90% to 88%.
New-business volumes remained under pressure, although conversion rates improved across all distribution channels and persistency remained stable. Momentum said management’s actions to improve lead quality and conversion rates had delivered positive results. The insurer continued to invest in lead generation, distribution capability, and adviser-productivity initiatives.
Momentum Insure also acquired the assets of insurtech company Control for R28m. Momentum said the acquisition would significantly improve its ability to engage with and deliver quotations to independent brokers.
Shift in annuity mix weighs on new-business margin
Momentum Investments increased new-business sales by 16% to R57.4bn, supported primarily by 24% growth in new business on its Wealth platforms.
Guaranteed annuity volumes declined by 26%, while living annuity volumes increased by 14%. Momentum said the shift towards lower-margin living annuities largely drove the reduction in the new-business margin from 1% to 0.6%.
VNB declined by 30%, from R509m to R357m, although higher Wealth-platform volumes and improved margins partly offset the decline in annuity VNB.
Momentum Investments nevertheless increased normalised headline earnings to R1.19bn. The result was supported by strong annuity profits, higher returns on the assets backing these portfolios, the repricing of its back-to-back product, and increased asset-based fee income from the Wealth business.
Assets under administration increased by 16% to R581bn, while assets under management rose by 9% to R611.5bn. Net inflows reached R20bn, supported by new-business inflows and favourable market performance.
Retail savings drive improved new-business value
Momentum Retail increased new-business sales by 8% to R9.4bn, supported by growth in its Investo long-term savings business, while protection volumes declined slightly.
VNB more than doubled from R45m to R98m, and the margin improved from 0.5% to 1%. Momentum attributed the improvement to higher savings volumes, enhancements to Investo, and distribution costs and initial expenses increasing more slowly than new-business volumes.
Momentum Retail’s normalised headline earnings, however, declined by 26% to R1.01bn. Momentum attributed the decline primarily to a negative market variance of R320m in the protection business, arising from lower long-dated yields. The group said Retail was affected most by the reduction in its ultimate spot-rate assumption from 10% to 9.3% because of the long-dated nature of the underlying cash flows. Operating experience remained favourable.
Corporate reports strong sales but pressure on protection deals
Momentum Corporate’s new-business sales rose by 38% to R16.2bn, supported by large single-premium structured-investment, living-annuity, and FundsAtWork deals. Recurring-premium business also benefited from protection new business and FundsAtWork retirement products.
A shift towards higher-margin FundsAtWork protection and savings business helped to narrow its VNB loss from R51m to R7m. Momentum said pricing pressure on large protection deals also dampened volumes and profitability.
Normalised headline earnings declined by 12% to R1.42bn following a strong result in the previous year. Momentum attributed the decline mainly to lower reserve releases and heavier mortality on the in-force continuation-assurance portfolio.
Other businesses contribute to earnings growth
Momentum Africa increased new-business sales by 45% to R5.2bn, the highest growth among the group’s businesses. Its VNB loss narrowed from R21m to R17m, while its negative margin improved from 0.6% to 0.3%.
Normalised headline earnings rose by 79% to R387m, supported by improved operating performance and turnarounds in Botswana and Lesotho. Namibia remained the largest contributor, although its earnings declined by 17%.
Guardrisk delivered record normalised headline earnings of R1.04bn, an increase of 26%. Momentum attributed the performance primarily to underwriting profits, supported by higher management-fee and investment income.
Guardrisk General Insurance’s underwriting result increased by 26% to R828m, while Guardrisk Life’s underwriting result rose from R45m to R244m. Expenses increased as Guardrisk invested in employees, recruitment, and data-management capabilities to support future growth.
Momentum Health increased normalised headline earnings by 15% to R367m, aided by growth in South African membership, annual increases in administration and managed-care fees in public-sector medical schemes, and improved revenue from capitation contracts.
Overall membership grew by 27%, mainly because of the onboarding of Bonitas Medical Scheme and continued growth in Health4Me. Direct expenses increased by 11%, partly because of the initial costs of implementing the Bonitas administration contract.
Momentum acknowledged that the short onboarding and planning period had caused initial difficulties. It said the resulting backlog and member queries had largely been resolved.
The group’s health insurance business in India achieved positive annual IFRS 17 earnings for the first time. Normalised headline earnings improved from a R67m loss to a R22m profit, supported by premium growth, pricing improvements, fewer onerous contracts, and a more favourable business mix.
Expense discipline supports profitability
Momentum’s group-wide performance-optimisation programme had generated R810m in annualised savings by year-end, helping to limit growth in direct expenses to 3%, below the prevailing inflation rate. Momentum also cited expense discipline as a factor in the improved new-business value reported by Metropolitan Life and Momentum Retail.
The group completed its planned R1bn share buyback, repurchasing 27.4 million shares at an average price of R36.45. Momentum said the price represented an average discount of 28% to year-end embedded value and created a R388m uplift for remaining shareholders. In total, the group repurchased 45 million shares for R1.6bn during the financial year.
Momentum declared a final dividend of 120 cents a share, taking the full-year dividend to 230 cents, an increase of 31%. The full-year dividend represented a payout ratio of 43%, within the group’s target range of 40% to 60% of normalised headline earnings per share.
Affordability remains a constraint
Momentum said South Africa’s modest economic growth and continuing pressure on household affordability were likely to shape demand for financial products and services.
Although inflation had moderated and interest rates had begun to decline, households were still absorbing the effects of several years of high living costs, particularly transport, electricity, and other essential expenses, the group said.
Momentum is developing its next strategic plan and expects to disclose its strategy to the 2030 financial year within the next 12 months.
