Our opinion on the current state of MTM.

Momentum Metropolitan (MTM) is an insurance company listed on the JSE and the Namibian stock exchanges. It was formed by the merger of Momentum and Metropolitan in December 2010. The company participates in all aspects of short and long-term insurances and various financial services. The company was the first insurance company to achieve level 1 BBBEE status. The company is closing its businesses in Mozambique, Mauritius, Zambia, Tanzania, and Swaziland. At the time of the merger between Momentum and Metropolitan, they had a combined 24% of the life insurance market in South Africa. Today that has been reduced to just 17%. The company paid out almost R4bn in death claims in the 1st quarter of 2021 - three times higher than it anticipated, mainly due to the 2nd wave of the virus. The company said that it would consider managing with about 60% of its current office space because of the move to work-from-home as a result of COVID19. In its results for the six months to 31st December 2022 the company reported headline earnings per share (HEPS) up 43% and embedded value up 11%. The company said, "While the prior period's results were negatively impacted by heightened mortality experience resulting from Covid-19 (net of releases of Covid-19 reserves), mortality experience in the current period has normalised to levels last seen in 2019". In an operational update on the 9 months to 31st March 2023 the company reported headline earnings per share (HEPS) up 29% and new business volumes down 8%. The company said, "This growth in earnings was supported by the improved mortality experience in the life businesses, benefiting from the less severe impact of Covid-19 (net of release of Covid-19 reserves) in the current period". On 26th May 2023 Business Day reported that Jeanette Marais would take over from Hilgard Meyer as CEO on 30th September 2023. Business Day reported a trading statement on 24th August 2023 for the year to 30th June 2023. The company estimated that HEPS would rise by between 2% and 7%. Technically, the share has begun to move up in recent months and may be entering a new upward trend. On a P:E of 5,97 and a dividend yield (DY) of 4,53% it looks reasonably priced to us.