Transcript Investor presentation

Investor presentation
Interim financial results
30 June 2001
Highlights
 Business highlights
 Creation of New Africa Capital
 Dynamic new operating structure implemented
 Empowerment credentials of the board enhanced
 Increase of earnings from diversified sources
 Financial highlights
 Total assets under management: approximately R40 billion
 Positive net cash flow in excess of R2 billion
 Sustained strong growth in Employee Benefits business
 Increased profits from Health business
Features of results
6 months to Annualised 15 months to
30/06/01
growth
31/12/00
Rm
%
Rm
Premium income
Total income
Administration expenses
Policyholders’ benefits paid
Total assets
Total assets under management
Earnings
Headline earnings
Earnings per share (cents)
Headline earnings per share (cents)
Dividend per share (cents)
•No June 2000 FSV valuation
•March 2000 not always comparable
3 601
5 233
377
2 447
31 473
39 059
247
267
34.02
36.78
15.50
26.7
(5.2)
11.5
39.5
13.4
18.3
10.7
(4.5)
8.3
(6.6)
0.6
7 106
13 806
845
4 384
29 492
35 777
558
699
78.56
98.46
38.50
Premium income
6 months to
30/06/01
Rm
Premium income
6 months to
%
30/06/00 Change
Rm
3 601
3 092
16.5
Recurring premiums
Individual life
Employee benefits
Re-insurance
1 910
1 412
533
(35)
1 852
1 369
522
(39)
3.1
3.1
2.1
(10.3)
Single premiums
Individual life
Employee benefits
1 691
560
1 131
1 240
215
1 025
36.4
160.5
10.3
Recurring premiums
6 months to
30/06/01
Rm
6 months to
%
30/06/00 Change
Rm
Metropolitan Life
Metropolitan Employee Benefits
Odyssey
Namibia
Botswana
Recurring premiums excluding Commercial Union
Commercial Union Life
1 055
431
123
104
44
1 757
153
1 037
391
109
85
22
1 644
208
1.7
10.2
12.8
22.4
100.0
6.9
(26.4)
Recurring premiums
1 910
1 852
3.1
Single premiums
6 months to 6 months to
30/06/01
30/06/00
Rm
Rm
%
Change
Metropolitan Life
Metropolitan Employee Benefits
Odyssey
Namibia
Botswana
Single premiums excluding Commercial Union
Commercial Union Life
481
1 119
43
38
1 681
10
181
998
27
7
1
1 214
26
165.7
12.1
59.3
442.9
38.5
(61.5)
Single premiums
1 691
1 240
36.4
Policyholders’ benefits paid
6 months to
30/06/01
Rm
Death and disability claims
Maturity claims
Annuities
Surrenders – individual policies
Scheme member withdrawals
Scheme terminations
Re-insurance recoveries
6 months to
%
30/06/00 Change
Rm
456
379
186
484
263
703
(24)
412
322
156
385
142
281
(29)
10.7
17.7
19.2
25.7
85.2
150.2
(17.2)
2 447
1 669
46.6
Policyholders’ benefits paid
6 months to
30/06/01
Rm
6 months to
30/06/00
Rm
%
Change
Metropolitan Life
Metropolitan Employee Benefits
Odyssey
Namibia
Botswana
Benefits paid excluding Commercial Union
Commercial Union
854
504
107
78
16
1 559
888
825
332
99
46
3
1 305
364
3.5
51.8
8.1
69.6
433.3
19.5
144.0
Policyholders’ benefits paid
2 447
1 669
46.6
Benefit payments as a % of
premiums
Death and disability claims
Maturity claims
Annuities
Surrenders – individual policies
Scheme member withdrawals
Scheme terminations
6 months to
30/06/01
%
6 months to
30/06/00
%
12.7
10.5
5.2
13.4
7.3
19.5
13.3
10.4
5.0
12.5
4.6
9.1
Administration expenses
– life insurance
Rm
%
12
400
350
11.5
300
250
11
200
150
10.5
100
50
0
10
Mar-00
Jun-00
Jun-01
9.5
Metropolitan Life Limited
CU Life
Metropolitan Odyssey
Metropolitan Namibia
Metropolitan Botswana
Mar-00
Jun-00
01-Jun
Administration expenses as a % of premium income
Income from administration
business
For the six months ended 30 June 2001
Administration
income
Rm
Administration
expenses *
Rm
Total
Rm
30
7
199
8
8
8
260
260
22
5
165
8
17
217
(3)
214
8
2
34
(9)
8
43
3
46
Asset Management
Properties
Health group
Unit trusts
Ovation
Policy administration (Life insurance)
Taxation
Income from administration business
* Taxation is included in administration expenses for the period under review.
Statement of actuarial values of
assets and liabilities
Total assets per balance sheet
Current liabilities per balance sheet
Outside shareholders’ interest per balance
sheet
Actuarial liabilities under unmatured policies
Excess of assets over liabilities
Total surplus arising during period
FSV profit
Operating profit
Investment income on group excess
Effect of change in basis
Capital appreciation on group excess
30/06/01
Rm
31/12/00
Rm
31 473
(1 324)
29 492
(1 332)
(68)
(23 937)
(62)
(22 181)
6 144
5 917
110
267
180
87
(46)
(111)
1 569
705
408
297
864
Analysis of headline earnings
6 months to
30/06/01
Rm
Metropolitan Life
Metropolitan Employee Benefits
Odyssey
Commercial Union Life
Namibia
Botswana
Health
Asset Management
Unit trusts
Ovation
CGU
Other subsidiaries
15 months to
31/12/00
%
Rm Change
Investment income
Headline earnings
Goodwill
Adjustment for minorities and 90:10 rule
119
52
7
20
(10)
(1)
29
8
1
(4)
(1)
220
47
267
(20)
20
291
97
7
62
3
4
13
11
(22)
36
(1)
501
198
699
(46)
52
FSV profit
267
705
9.8
(40.7)
(4.5)
(5.3)
Embedded value
30/06/01
Rm
31/12/00
Rm
Adjusted net asset value
Net value of in-force business
Individual life
Gross value of in-force
Less: Cost of capital
Employee benefits
Gross value of in-force
Less: Cost of capital
5 357
2 393
1 939
2 039
(100)
454
522
(68)
4 987
2 260
1 898
2 038
(140)
362
480
(118)
Embedded value
7 750
7 247
Embedded value per share (cents)
1 066
1 018
37
122
Net value of new business for period
No adjustment has been mad for CGT. The estimated reduction would be R153 million or 2%.
Embedded value by company
Commercial Union Life
Odyssey
Namibia
Botswana
Asset Management
Health group
Goodwill
Metropolitan SA
Value of in-force business
Residual net asset value
30/06/01
Rm
31/12/00
Rm
341
212
176
61
197
456
(165)
6 472
2 066
4 403
321
190
189
53
180
343
(175)
6 146
1 951
4 195
7 750
7 247
Embedded value profit
6 months to 15 months to
30/06/01
31/12/00
Rm
Rm
Profit from new business
Point of sale
Expected return to end of period
Profit from existing business
Expected return
Experience variance
178
174
4
105
214
(109)
197
179
18
503
464
39
Embedded value profit from operations
283
700
Investment return on net worth
Transitional tax
Changes in assumptions
(72)
175
941
(95)
182
Total embedded value profit
386
1 728
117
-
97
(296)
503
1 529
10.7
24.2
Plus: Capital raised
Less: Dividend
Increase in embedded value
Return on embedded value (%)
Value of new business
6 months to 15 months to
30/06/01
31/12/00
Rm
Rm
Value of life insurance new business
Individual life
Gross value of new business
Less: Cost of capital
Employee benefits
Gross value of new business
Less: Cost of capital
(4)
0
(4)
41
44
(3)
44
71
(27)
78
92
(14)
37
122
109
29
49
8
Value of non-life new business
Metropolitan Health
Metropolitan Asset Managers
The comparative period figures have been reallocated to reflect the group’s internal restructuring.
Value of new business per
company
6 months to 30/06/01
Gross
Cost of
Net
capital
Rm
Rm
Rm
Metropolitan
Individual life
Employee benefits
Commercial Union Life
Odyssey
Namibia
Botswana
15 months to 31/12/00
Gross
Cost of
capital
Rm
Rm
47
(1)
48
(3)
(2)
1
(6)
(3)
(2)
(1)
(1)
-
42
(4)
46
(3)
(3)
1
163
77
86
43
(7)
37
Net
Rm
(8)
2
6
(39)
(26)
(13)
(1)
(1)
124
51
73
(8)
1
5
163
(41)
122
New business premiums
Recurring premiums
Individual life
Employee benefits
Total
6 months to
30/06/01
Rm
15 months to
31/12/00
Rm
252
71
323
705
241
946
560
1 131
1 691
453
1 715
2 168
Single premiums
Individual life
Employee benefits
Total
Assets under management
30/06/01
Rm
31/12/00
Rm
%
Change
Investment assets
Strategic assets
Goodwill
Equipment and intangibles
Current assets and deferred tax
Total on-balance sheet assets
Unit trusts
Health group
Ovation
Asset Management
29 339
64
396
183
1 491
31 473
1 898
1 300
872
3 516
27 598
64
410
179
1 241
29 492
1 740
1 159
741
2 645
12.6
(6.8)
4.4
40.2
13.4
18.2
24.4
35.4
65.8
Total assets under management
39 059
35 777
18.3
Assets backing shareholders’
funds
Equities
Foreign investments
Properties
Fixed interest
Money market
Group companies
Assets backing shareholders’ funds for Metropolitan Life Limited.
30/06/01
%
31/12/00
%
46
18
9
2
25
100
48
18
10
2
22
100
Excess capital in Metropolitan
Life Limited
Company excess
Less:
Transfer to New Africa Capital
2 x CAR (eg)
Interim dividend and STC
30/06/01
Rm
31/12/00
Rm
5 058
(1 838)
(2 240)
(113)
867
4 739
(1 838)
(1 544)
1 357
Capital management strategy
 New structure will enhance capital management ability
 Identify use of and return on capital
 Manage capital adequacy requirement
 Utilise capital effectively
• Business growth
• Strategic acquisitions
• Share bay-back
• Dividend policy
Focus areas
 Investment performance
 New business volumes
 Expense levels
 Return on shareholders’ value
Focus areas







Capital management
Empowerment credentials
Surrender and lapse rates
New business levels
Increase presence in Gauteng
Financial disclosure
Market segmentation







Creation of NAC
Board appointments
Agreement with PolicyLink
Creation of MARS
Project Goldrush
Group actuary appointed
Research completed
Corporate successes
Cost Embedded
value
30/06/01
Commercial Union Life
Odyssey
Namibia
Botswana
Asset Management
Health group
Embedded
value
31/12/00
Rm
Rm
Rm
149
200
40
19
241
341
212
176
61
197
456
321
190
189
53
180
343