Momentum Metropolitan : Summary of Financial Information and AGM Notice

Grow existing

channels

F2024 Reinvent and Grow strategic objectives

NHE of R4.6 to R5 billion

Our financial performance

Normalised headline earnings (NHE)

R4 383 million

(F2021: R1 007 million)

Present value of

new business premiums (PVNBP)

R72 673 million

(F2021: R65 898 million)

Value of new business (VNB)

R626 million

(F2021: R725 million)

Value of new business margin

0.9%

(F2021: 1.1%)

For society

Level 1 B-BBEE status

maintained

B-BBEE preferential procurement

R3.6 billion

(F2021: R2.6 billion)

Invested in enterprise development initiatives

R5 million

(F2021: R5 million)

Total community investment of

R27.5 million

(F2021: R27.5 million)

For our employees

and advisers

Paid in remuneration

R6.8 billion

(F2021: 6.7 billion)

Invested in training and development

R297 million

(F2021: R244.6 million)

96 700 hours

in business development support through ASISA ESD Fund (F2021: 96 100 hours)

13 000 beneficiaries benefited from the first iSabelo dividend declaration

For providers of financial capital

Distributed

R734 million

through dividends (F2021: R365 million)

Return on equity (ROE)

22.7%

(F2021: 4.9%)

Embedded value per share

R29.77

(F2021: R27.08)

Return on embedded value per share

11.7%

(F2021: 6.3%)

R381 million

interest paid to debt funders (F2021: R486 million)

For the environment

B score

for our voluntary participation in the CDP climate change disclosure project

(F2021: B score)

Invested in renewable energy

R2.3 billion

(F2021: R2.1 billion)

Formal supporter of TCFD

Reduction in overall GHG emissions of

34% against 2014 baseline (F2021: 33%)

Transformation

Claims paid on insurance products

R40.3 billion

(F2021: R31.1 billion)

Policies in force providing our clients with protection

4 million

(F2021: 4 million)

Assets under management and administration

R859.3 billion

(F2021: R822.3 billion)

Signatory of the UNsupported Principles for Responsible Investment (UNPRI) since 2006

Positive: net increase in capital

Neutral: no movement in capital

Negative: net decrease in capital

Message from our Chairs

We previously described last year as being unprecedented in the modern insurance era. Unfortunately, the 2022 financial year brought its own significant and unpredictable challenges. In contrast to the impacts from the 2008/9 financial crisis, the events during our 2022 financial year were more fundamental, in that it largely occurred here at home in South Africa, not on the other side of the world. The public violence and looting in KwaZulu-Natal and Gauteng in July 2021 as well as two sets of floods in KwaZulu-Natal in April and May 2022 brought about severe disruptions. We continue to face political and economic uncertainty, unprecedented levels of unemployment and rising inflation in South Africa. Global uncertainty stemming mainly from the Russia- Ukraine war and the ongoing impact of both the war and the Covid-19 pandemic on food security and supply chains, has resulted in rapidly rising inflation, struggling economies and community unrest as citizens battle to make ends meet.

In the face of this, the Group has once again proved its resilience. Not only were we able to survive this period, we were also able to build for the future

by implementing our Reinvent and Grow strategy. Instead of retreating with the sole aim of protecting the business, the business was resilient enough to concurrently protect itself and invest in the future.

We came through this challenging period far better than expected and as a result we enter the new financial year in a stronger financial position than previously, with normalised headline earnings of R4.4 billion and a return on equity of 22.8%. Our solvency and liquidity position strengthened over the year, allowing us to not only grow ordinary dividends paid, but to also initiate a share buyback programme.

While the current environment makes it very challenging to meet the goals we set ourselves for the 2024 financial year in our Reinvent and Grow strategy, we believe that the Group is well-positioned to do so.

Digital transformation

There are numerous examples of how we have been building for the future, best reflected in the progress we have made with our digital transformation. Momentum Wealth's radical shift to a cutting edge digital-wealth management and service optimisation platform is on track. In our advice-led distribution, using digitally enabled channels and sales processes have improved the adviser experience and are creating client journeys that compete with the wide range of digital experiences our clients have on offer. Our investment in insurtech and fintech start-ups facilitated the development of innovative new solutions for use in new initiatives that require advanced digital tech- nology, for example, the provision of microinsurance products that facilitate financial inclusion and client education. Momentum Life made good progress towards the adoption of point-of-sale underwriting solutions, digitally transforming its onboarding experience and improving onboarding efficiency through a mobile phone paperless capturing capability in Myriad.

We believe that these initiatives, along with others, will play important roles in future proofing the Group.

In the face of severe headwinds, Momentum Metropolitan proved its resilience. Not only was it able to generate strong earnings, but at the same time it laid the foundation for robust future growth

Passing the Chair's gavel

During 2021, Sello Moloko informed us of an opportunity that he wished to persue away from the Group. Having obtained consent of the Prudential Authority, Peter Cooper stepped in as Interim Chair. With Sello's initial assistance, we embarked on a disciplined search for

a new chair. The detailed scientific approach that we followed mirrors the manner in which we have in the past filled Board and executive positions. The Board is delighted to have found a Chair of the calibre of Paul Baloyi, who assumed the Chair's position on 1 July 2022. This joint message from Peter, as Interim Chair to 30 June 2022, and Paul, as the incoming Chair, thus serves as the passing of the proverbial Chair's gavel.

Sustainability and social relevance

Momentum Metropolitan has a role to play as a responsible corporate citizen in the context of increasing social and gender inequality, youth unemployment, increased pressure on utility providers and deteriorating infrastructure that is exceedingly vulnerable to climate-related disasters such as the floods in KwaZulu-Natal. Although we have always been committed to sustainability principles and have built many of our financial solutions around social challenges, there is an urgent need to accelerate the impact achieved.

Following a deep reflection on the world we are living in, the Group published its first Sustainability Report this year, which lays out our future intent following a deep reflection on the world we are living in. The Group is committed to various climate-related initiatives and disclosure projects including being a voluntary participant

in the CDP Climate Change Disclosure Project since 2013 and becoming a formal, listed supporter of the international Taskforce on Climate-Related Financial Disclosures (TCFD).

We took the opportunity to reinvent our head office and prepare it for when our employees came back to the office after the Covid-19 pandemic during which our employees worked from home. As they begin to come back to the office they are welcomed by a different, energising, more collaborative space, catering for the newly evolved hybrid way of work and protecting our employees' wellness.