Momentum Group reported stronger earnings and higher new business volumes for the nine months to the end of March 2026, but it said pressure on new business margins persisted as the product mix in parts of the business continued to shift.
Normalised headline earnings rose 15% to R5.54bn from R4.828 billion in the prior period, while normalised headline earnings per share increased 20% to 414 cents from 346 cents. Momentum said the per-share increase outpaced earnings growth because the number of shares in issue fell following buyback activity during the period.
Group present value of new business premiums (PVNBP) increased 15% to R66.885bn from R58.043bn, supported by healthy investment flows in Momentum Corporate, continued growth on the Momentum Investments wealth platform, and major corporate scheme wins in Momentum Africa.
Recurring premiums rose 7% to R3.304 billion and single premiums increased 15% to R50.229nm. Value of new business (VNB), however, declined 4% to R347m from R363m, while the group’s new business margin narrowed to 0.5% from 0.6%.
Momentum said the decline in group VNB was mainly attributable to Momentum Investments, where an industry-wide shift from life annuities to living annuities affected profitability as lower bond yields reduced the attractiveness of guaranteed annuity income.
It also said the relatively modest pace of contractual service margin (CSM) growth, compared with stronger premium volumes, reflected broader ongoing margin pressure on new business. Group CSM margin increased 3% to R20.989bn from R20.305bn a year earlier.
Divisional new business trends
Momentum Retail reported PVNBP of R7.021bn for the nine months, up 9% from R6.417bn, while VNB increased 79% to R75m from R42m. The division’s new business margin improved to 1.1% from 0.7%.
Momentum said long-term savings business increased, supported by a few large deals and the launch following improvements to Investo, while the improvement in VNB was linked to higher Investo volumes and improved product economics.
Momentum Investments remained the largest contributor to new business volumes. Its PVNBP increased 14% to R40.616bn from R35.739bn, but VNB declined 32% to R270m from R396m, with the division’s new business margin narrowing to 0.7% from 1.1%.
Momentum said this reflected a 20% increase in new business volumes on the Momentum Wealth platforms, partly offset by a 22% decline in annuity new business volumes as the market continued to shift towards living annuities.
The division’s assets under administration grew 18% to R572bn, assets under management rose 9% to R654bn, and net inflows recovered to R1.3bn from a net outflow of R13.5bn in the prior period.
At Metropolitan Life, PVNBP declined 13% to R4.324bn from R4.949bn, but VNB improved to a positive R52m from a loss of R9m in the prior period. Its new business margin improved to 1.2% from negative 0.2%.
Momentum said protection and life annuity volumes outperformed recurring savings business during the period, reflecting an improved business mix.
Momentum Corporate recorded PVNBP growth of 32% to R10.892bn from R8.225bn. VNB remained negative but improved to a loss of R27m from a loss of R39m, while the division’s new business margin improved to negative 0.2% from negative 0.5%.
Momentum said growth was driven by FundsAtWork investment and protection recurring premiums, while the VNB improvement reflected a change in new business mix towards higher-margin FundsAtWork protection business. It also said the business achieved good retention through focused client engagement, proactive client management, and lower industry turnover.
Momentum Africa increased PVNBP by 49% to R4.032bn from R2.713bn. VNB improved to a loss of R23m from a loss of R27m, and the new business margin improved to negative 0.6% from negative 1%. Momentum said the growth in volumes was driven by major group risk scheme wins in Botswana and Lesotho, as well as annuity growth in Botswana.
It added that earnings in the segment were affected by the depreciation of the Botswana pula against the rand, while health insurance and asset management earnings were negatively affected by the disposal of Ghana, effective 9 September 2025.
Earnings across the operating units
Across the operating units, Momentum said earnings contributions were broad-based.
Momentum Retail increased normalised headline earnings by 1% to R973m from R967m.
Momentum Investments increased earnings by 53% to R992m from R647m, supported by a higher contractual service margin release from the annuity book, fewer onerous contracts, and favourable equity market performance, although the group said fee income moderated in the third quarter.
Metropolitan Life increased earnings by 21% to R767m from R636m, supported by fewer onerous contracts, positive mortality experience, and disciplined expense management.
Momentum Corporate increased normalised headline earnings by 1% to R1.136bn from R1.127bn, with the group citing favourable market variances, continued strong underwriting results, and increased investment income.
Momentum Africa increased earnings by 60% to R304m from R190m, supported by solid investment income, improved operating profits, and positive economic assumption changes.
Guardrisk increased earnings by 16% to R693m from R598m. Momentum said Guardrisk’s underwriting profit was supported by strong commercial lines performance and disciplined underwriting, while growth in client management fees and higher investment income also contributed.
It said Guardrisk’s year-to-date growth was driven by the scaling of new and existing cell captive relationships, while Guardrisk General Insurance also benefited from strong broker channel activity contributing meaningfully to underwriting growth.
Momentum Insure increased normalised headline earnings by 9% to R366m from R336m. The group said the business benefited from a disciplined underwriting result, with the claims ratio improving to 46% from 51% in the prior period. It added that the combined ratio improved to 86%, well ahead of longer-term expectations, supported by benign weather exposure and continued underwriting and pricing discipline.
Momentum said insurance revenue declined marginally, with new business volumes remaining under pressure and insufficient to replace policy lapses in a competitive market, while expenses are expected to increase in the fourth quarter as the business invests in marketing and lead generation initiatives.
Momentum Health increased normalised headline earnings by 35% to R343m from R254m. The group said this was driven by growth in overall membership, favourable underwriting experience in capitation contracts, and disciplined expense management.
Overall membership grew 5% to 1.36 million year on year, with growth in the public segment and Health4Me, while Momentum Medical Scheme membership remained stable and the corporate segment remained under pressure.
Momentum said membership in Africa increased 14%, supported by a large client onboarding in Mozambique and new groups after the exit of a competitor in Lesotho.
India moved to a normalised headline earnings profit of R3m from a loss of R42m in the prior period. Momentum said gross written premiums increased 24% year on year, or 42% on a local-currency basis, supported by expansion across retail and group channels.
The combined ratio improved to 111% from 114%, although the claims ratio increased to 83% from 77%, reflecting higher benefit utilisation in group business.
Costs and capital
On costs, Momentum said direct expenses increased 1% to R11.381bn, which it said was well below inflation and reflected cost containment across the group. It said the performance optimisation programme had delivered cumulative annualised savings of R641m to date, including R131m added during the quarter.
The group said the solvency positions of its regulated entities remained within or above their target ranges.
Momentum Metropolitan Life’s solvency cover improved from 1.64 times on 31 December 2025 to 1.81 times solvency capital requirement on 31 March 2026, placing it at the midpoint of its target range of 1.6 to 2.0 times. Momentum attributed the improvement to higher yields over the quarter, moderation in the extrapolation of unobservable rates, and strong statutory earnings, partly offset by the interim dividend payable.
Momentum also said it completed its R1bn share buyback programme by 8 April 2026, repurchasing 27 million shares at an average price of R36.54 per share, which it said represented an 18% discount to embedded value of R44.55 per share.
As part of balance sheet optimisation, it raised R1.5bn in subordinated debt on 19 May 2026.
Outlook statement
Momentum said the global operating environment remained uncertain, and South Africa’s growth prospects has weakened as earlier tailwinds gave way to a more challenging backdrop.
It said household finances remained under strain, consumer demand was muted, and higher imported fuel costs were putting pressure on inflation and economic growth.
Momentum said it remained well positioned to sustain its growth trajectory, supported by diversified earnings streams, disciplined capital allocation, and strategic investments, including the onboarding of Bonitas and the continued scaling of its India operations.
