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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" March 28 – Fitch Ratings has affirmed South Africa-based Momentum Group Limited’s (Momentum) and Metropolitan Life Limited’s (MetLife) National Insurer Financial Strength (IFS) ratings at ‘AA(zaf)’ and National Long-term ratings at ‘AA-(zaf)’. The Outlooks are Stable. Fitch has simultaneously affirmed both Momentum’s and MetLife’s subordinated debt at ‘A(zaf)’. At the same time, Fitch has also […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-9415","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=9415"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9415\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}March 28 - Fitch Ratings has affirmed South Africa-based Momentum Group\nLimited's (Momentum) and Metropolitan Life Limited's (MetLife) National Insurer\nFinancial Strength (IFS) ratings at 'AA(zaf)' and National Long-term ratings at\n'AA-(zaf)'. The Outlooks are Stable. Fitch has simultaneously affirmed both\nMomentum's and MetLife's subordinated debt at 'A(zaf)'.\t\n\t\nAt the same time, Fitch has also affirmed Momentum's and MetLife's parent and\nthe ultimate holding company of the MMI group, MMI Holdings Limited's \n(MMIH) National Long-term rating at 'A+(zaf)'. The Outlook is Stable.\t\n\t\nThe affirmations reflect the MMI group's solid performance despite the difficult\noperating conditions, strong capital position, well established domestic\nfranchise and strong and diversified distribution network. Offsetting these key\nrating drivers is some earnings volatility stemming from the group's exposure to\ninvestment markets and the continued tough South African economic environment.\t\n\t\nThe group's performance improved for the six months ended 31 December 2011\n(H112) with core headline earnings up 4% at ZAR1,294m (H111: ZAR1,243m). Despite\nthis, the group's annualised return on embedded value (ROEV) fell to 7.1% (FY11:\n11.0%). The deterioration was mainly attributable to the weak performance of the\nlocal equity market in the second half of 2011 relative to the second half of\n2010 as well as the implementation of a more conservative investment mandate for\nMetLife's shareholder capital. The new mandate resulted in a one-off increase in\nthe opportunity cost of capital in the embedded value (EV) calculation which in\nturn reduced EV by ZAR523m. Excluding this once-off cost, the group's annualised\nROEV was only slightly lower at around 10.7% in H112 compared to FY11.\t\n\t\nThe improvement in earnings was supported by solid performances in the\nMetropolitan Retail and Metropolitan Health business units. New life business\nmargin on a present value of new business premiums basis increased slightly to\n1.5% in H112 (FY11: 1.4%; H111: 1.6%). Fitch expects the group to achieve\nrevenue and cost synergies from the group's merger activities. By end-June 2014,\nthe group expects to reduce its annual costs by ZAR500m.\t\n\t\nThe group's capital adequacy requirement (CAR) cover ratio remained unchanged at\n2.3x at end-H112 (FYE11: 2.3x). Although the agency considers this to be a\nstrong level it notes the group's capitalisation is somewhat sensitive to equity\nmarket volatility. At end-H112, 12% of assets backing the group's shareholders'\ncapital comprised equities. MetLife and Momentum (the large life licenses of the\nMMI group) had CAR cover ratios of 2.7x and 2.1x respectively at end-H112\n(FYE11: 2.3x and 2.3x respectively). The improvement in MetLife's CAR cover\nratio was attributable to the implementation of a more conservative investment\nmandate for the shareholders' capital in H112. The deterioration in Momentum's\nCAR cover ratio was mainly due to the annual dividend payment to MMIH.\t\n\t\nAlthough an upgrade is unlikely in the near term, the key rating drivers that\ncould result in an upgrade in the medium-term include the group achieving the\nexpected merger benefits (revenue and cost synergies), a significant improvement\nin profitability as indicated by operating return on assets, a sustained strong\ncapital position at current levels, continued maintenance of market share, as\nwell as an improvement in economic conditions.\t\n\t\nIf there is a substantial, sustained deterioration in capitalisation based on\nFitch's assessment or a sustained drop in the group's regulatory CAR cover ratio\nto below 1.7x, and\/or a sustained poor operating performance driven by a\nsignificant equity market decline, lower new business margins or a severe\nweakening of market share, this would lead to negative rating action.\t\n\t\n\t\nAdditional information is available at www.fitchratings.com.\t\n\t\nThe ratings above were solicited by, or on behalf of, the issuer, and therefore,\nFitch has been compensated for the provision of the ratings.\t\n\t\nApplicable criteria, 'Insurance Rating Methodology' dated 22 September 2011, is\navailable at www.fitchratings.com.\t\n\t\nApplicable Criteria and Related Research:\t\nInsurance Rating Methodology<\/pre>\n