Unprecedented COVID-19 mortality slows Momentum FY performance

Momentum, a leading financial services provider, is facing challenges due to the impact of COVID-19 on its operations. The company's Group operating profit plummeted by 93 percent, and headline earnings per share dropped by 57 percent to 30.9 cents per share in the year ending June 2021. Despite these setbacks, Momentum Deputy CEO Jeanette Marais remains optimistic about the future and is committed to navigating the uncertainties brought on by the pandemic. Marais highlighted concerns about the slow rate of vaccinations in South Africa and emphasized the importance of immunization in reducing mortality rates. She noted a significant decrease in mortality claims from July and August compared to the peak of the third wave. While the numbers have improved, Marais acknowledged that mortality claims remain elevated. To address vaccine hesitancy, Momentum operates around five vaccination sites and is actively encouraging both employees and clients to get vaccinated. In the fight against vaccine hesitancy, Marais outlined a two-pronged approach. For clients, the company is initiating campaigns to provide accurate information, dispel misinformation, and promote the benefits of vaccination. While Momentum supports individual choice, Marais hinted at the possibility of adjusting premiums based on vaccination status in the future. However, she emphasized the importance of education and awareness in shaping behavior. Regarding internal policies, Momentum has taken a different approach by fostering a culture of responsibility and trust among employees. Despite the ongoing debate around mandatory vaccinations, Marais revealed that 73 percent of staff on Momentum health, the company's medical aid scheme, have voluntarily received the vaccine. This voluntary uptake demonstrates the power of encouragement and respect for individual choices. In addition to the challenges posed by the pandemic, Momentum has experienced notable successes in new business volumes. The company reported a 31 percent increase in new business across various segments, with Momentum Investments and Metropolitan Life leading the growth. Momentum Investments saw a 55 percent rise in client flows, driven by demand for guaranteed products and offshore investment opportunities. Meanwhile, Metropolitan Life witnessed a 25 percent surge in funeral policies and protection plans, underscoring the importance of insurance in uncertain times. Marais attributed the strong new business performance to a combination of factors, including a flight to safety among clients seeking stable investment options and a growing awareness of the need for insurance coverage. She expressed confidence in the sustainability of these trends and projected continued growth in key business areas. Despite the challenges posed by COVID-19, Momentum is adapting its strategies to mitigate risks and capitalize on emerging opportunities. By prioritizing vaccination campaigns, fostering a culture of responsibility, and driving growth in new business, the company remains resilient in the face of uncertainty. Marais's leadership and strategic vision position Momentum for long-term success in a rapidly evolving landscape.