Momentum Group Limited (MNTS) Q1 FY2026 Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to Momentum Group Limited's First Quarter 2026 Update. [Operator Instructions] Please note that this event is being recorded. I will now hand over to Jeanette Marais. Please go ahead, ma'am.

Thank you. Good morning, everyone. I welcome all our shareholders and our key stakeholders to our operating update for quarter 1 of financial year 2026. I'm joined on this call with me in the room by our Group Finance Director, Risto Ketola; as well as Rowan Burger and Abdur George from the Investor Relations team. To kick off, this quarter, we entered the second year of our 3-year impact strategy after we ended the first year on a very high note. We managed to continue the positive earnings trajectory into the first quarter of F 2026 and our strong operational performance resulted in normalized headline earnings of ZAR 1.76 million. Positive market variances contributed ZAR 201 million to our earnings versus ZAR 570 million in the previous comparable period, which highlights the strong underlying operational performance. I'm very happy with our sales, which improved by 8% to ZAR 22.4 billion. There's also a pleasing improvement across the segments. But like peers, we have seen a fall in the profitable life annuity product line as a result of a reduction in long-term interest rates. And to put that in perspective, we've seen a 28% year-on-year drop in life annuity sales, but only a 8% drop on the previous quarter. Despite the overall reduction, we have seen an improved -- sorry, let me just go back one. This was a key driver in the disappointing VNB decline from ZAR 197 million to ZAR 146 million. Despite the overall reduction, we've seen an improvement in VNB in all our other businesses. As a consequence of the decrease in VNB, our new business margin reduced from 1% to 0.7%. This remains a key area of focus as we strive to achieve our impact ambitions. We are encouraged by the excellent earnings performance we achieved over the past quarter, but we will maintain our enhanced focus on driving sales volumes, managing our expenses and improving the VNB margin in the near term for each business unit. The outlook for South Africa indicates modest growth due to improved energy availability and transport logistics, easing interest rates and inflation and the successful exit from the Financial Action Task Force grey list and ratings upgrade. A reduction in the inflation target is a welcome relief for our investment clients, but it does mean in the short term, we expect lower economic growth. Risto will explain the broader impact on our various business lines. While the green shoots of a recovery are encouraging, our operating environment remains challenged by an increasingly competitive landscape with subdued economic growth and the elevated cost of living affecting new business growth and margins. Despite this, we believe that the F 2027 impact targets we had set for ourselves remain achievable, namely normalized headline earnings of ZAR 7 billion, ROE of 20% and a VNB margin of between 1% to 2%. I will now hand over to Risto, who, as you know, has a knack for [ the ] explaining the complex results simply, but also to tease out some further points of interest. Thank you.

Yes. Thanks, Jeanette. I must say that for context, last year, we had earnings of ZAR 6.3 billion. At the time, we said that those were probably about ZAR 1 billion above normalized earnings, sort of half explained by markets being so strong and half explained by underwriting being so strong last year. And we said that we think ZAR 6 billion is a good number for 2026. So that's ZAR 1.5 billion a quarter. We did ZAR [ 1,750 million ] roughly for this quarter, knock off ZAR 200 million for investment variances. And you can sort of see that we're on line with what we thought was quite -- maybe not a crazy ambitious target, but a meaningful target of ZAR 1.5 billion a quarter. So a very good quarter adjusting for one-offs. Now we did not disclose last year's first quarter number in the trading update because we didn't do a full consolidation; however, back of a matchbox calculation basically gives earnings of about, let's say, ZAR 1.8 billion to ZAR 1.9 billion for the first quarter. So we're down a little bit on 1Q last year. But as Jeanette said, investment variances are maybe ZAR 300 million lower. So again, sort of operationally, you could see that there's quite good progress being made in the business. So no matter how you slice and dice it, there's more positives than negatives in this number. You might wonder why investment variances are so much lower than last year. I mean bond markets rallied in both periods. But last year, they were still transitioning on to the IFRS 17 balance sheet. So the hedging wasn't as fully in place as now. You could say that we're now in the end state hedging in terms of the hedge effectiveness. So we're a little bit less geared towards yields than we were, still a positive gearing though. So the bond market rally since October -- sorry, since September, probably another 200 million. So second quarter also looks quite good so far. So let's see how that develops. Beyond the investment items, mortality was good across the group. Every business area had good mortality. Disability was a bit more mixed, a little bit weaker on retail than in corporate. Persistency is also good across the group, which is quite pleasing. And then expenses are in line with budget. And talking of expenses, the optimization project, we added about ZAR 100 million more of annualized savings through that. A lot of that came from various business unit level and technology initiatives. I need to sort of put a bit more impetus on the procurement and duplication work streams, but we're still making good headway. I think our ability to invest as much as we have on technology and modernization yet keeping costs at inflation or below in aggregate, it would not have been possible without these ongoing savings everywhere else, okay? So I think the project is still very successful and enables us to spend money where we need to without having a negative impact on group earnings. A couple of things that might not be so obvious. So first of all, our SCR ratio is down quite a bit in the quarter to 1.76. Our target for the solvency coverage ratio is 1.6 to 2. So we've gone from the top end of the range to the middle of the range. To put that into context, I mean, during the quarter, we paid out quite big dividends to the group to both fund the external dividend and the buyback. So the outflows exceeded earnings for the quarter. So that's a bit of a timing thing. Also, the yield curves coming down as much as they did had a negative impact on the SCR because obviously, risks are measured on a PV basis. Also, if you look at the very detailed things, you might know that we need to use a prescribed yield curve to do the regulatory reporting and the prescribed yield curve actually has a very low long tail compared to what we think the market yield curve is. So it was sort of compounded there. And then lastly, the regulatory calculation changes the stress test on equities depending on how high the markets are. And because of the market running, we're now pretty much at the maximum stress test, which is about 50%. So we're effectively stress testing for a 50% shock in equities, whereas maybe in more market conditions will be more in the low 40s in terms of the stress test. So I'm not too -- I wouldn't read too much into the decline in the SCR ratio. There's a bit of technical factors there. VNB, Jeanette has already said quite a bit. I would add that the annuity sales were down about 1/3 and the value of new business from annuities were down about 50%. So the reduction in annuity sales explains the pressure on our VNB, and we made reasonable gains in all other areas. I did see some of the analyst reports. There was a question on India in one of the reports. Earnings went backwards on IFRS 17. They went -- they improved on Indian GAAP but went backwards in IFRS 17. Last year's first quarter number included a recovery in the loss component. Basically, the onerous in-force contracts were remeasured to be less onerous. So there was a bit of a one-off gain in those numbers. And then secondly, in this current period, there's been quite a bit of reinsurance commission income. And under the Indian GAAP, you recognize it upfront, whereas under IFRS 17, you spread it over time. So that explains the timing difference between IFRS 17 and Indian GAAP. Maybe the most important for this audience is the India team is still very confident that they will have a profit on the Indian GAAP this year and that profit should be sufficient to have a profit under IFRS 17. When I look at the numbers, operating metrics a bit more myself, volume growth is very good, expense management is very good, claims ratio is the wildcard still. So I think in my view, the only item that could really push the breakeven IFRS 17 further if the claims ratio gets worse from here. And then lastly, Jeanette mentioned that at business unit level, the variances were a little bit different. To try and summarize it, in metropolitan corporate and investments, the investment variances were positive because of bonds running and corporate and credit results being very good. In Momentum Retail, we actually had a small negative variance during the quarter, and that relates to the fact that we have a lot of cash flows in Mom retail that are beyond the yield curve. In other words, it's nonhedgeable cash flows beyond 25, 30 years. And the PV of those cash flows increased more than the PV of the -- well, the value of the hedging portfolio. So a small negative variance in Mom retail and quite nice positive variances everywhere else. Okay, I think I'll leave it at that and be more than happy to take questions.

[Operator Instructions] Our first question comes from Michael Christelis of UBS.

Well done on some comprehensive disclosure. It's refreshing to see an insurer that's prepared to give us full detail at quarterly dates. Four questions, if I can. Firstly, on your back-to-back product in Mom investments, you talk about lower onerous losses, significantly lower onerous losses, but then there's also lower VNB as well. So I'm just trying to square that. Is that a significant reprice there? Or what's driving that? The second one is very just technically, the PVNBP multiples that are implied by your volumes don't seem to have changed at all despite the fact that yields have come down. Is that just purely a mix issue that maybe changed year-on-year? Then your CSM releases are sort of quite seasonal. Half 2 is quite a lot bigger typically than half 1. Does that imply -- your CSM commentary seems to suggest it's grown in the quarter. Does that mean that you think it can continue to grow year-on-year for the full year if new business, et cetera, stays where it is? In other words, at this run rate, will you still be able to show a growing CSM in your view? And then the last question is just your expense savings and maybe just try and unpack what does that mean for VNB margins, all else being equal, if you achieve your cost saving targets, does -- do we see a material uplift in VNB margins as a result?

Okay. I'll answer those while Jeanette can think about adding on to it maybe. So you're right. So we have we have sort of designed -- well, let's move it extreme. We have repackaged the back-to-back product in investments. Now remember what this product is, it is annuity where you get a monthly income. But if you buy, you get a lump sum to pay back your original annuity amount. Now historically, we had a whole life component that was loss-making and a very profitable VNB component. Now because of this cross subsidy, which was by design at the time, it led to an onerous amount on the whole life component. Now we have repriced the 2 components in such a way that the whole life is more breakeven. But then obviously, the annuity margin comes down to keep the cost similar to the end consumer. Now the reason why the VNB is down, first of all, those volumes are down as well. So there's a bit of operational gearing. And secondly, net-net, the VNB we've given up on the annuity is a little bit higher than the VNB we gained on the life component. So we have removed the onerous component. It will probably have a small impact on VNB long term because of the new split between the 2 components, but the decline is mainly because the volumes are down literally 40%, I'm looking at it here. Okay. The present value of new business multiples, I mean, maybe I should start updating my own models because this hasn't come up in internal discussions. But remember, we do use opening assumptions, but the opening assumption should be lower as well year-on-year. At the same time, we did become more prudent on some of the persistency assumptions in Myriad for sure and 1 or 2 other products. So I wonder if somewhat coincidentally, some of the persistency strengthening has offset the risk this time rate. But I'm pretty sure that Rowan can get the actuaries to give you a lot more detailed answer. CSM releases, I mean, we have said for quite a while that our CSM underlying growth rate is probably sort of mid- to low single digits at the current level of new business. I do think at the current level of VNB, we will still eke out positive CSM growth for the year. But I mean you're touching on our biggest conversation point in the group is we need VNB to really probably double from this level for us to have what we will consider acceptable earnings growth of 8% to 10% in our core life business. So yes, it should be positive for the year, but not good enough for the year at this current level of VNB. I mean we did have positive assumption and experience variances again, which would suggest that your actuarial base is still, let's call it at least conservative. So we're not seeing any strain from the other components of CSM growth. So that's great. Expense savings, I think I covered this at the end of -- well, sometime last year with you in that if we get ZAR 1 billion of savings, let's call it, ZAR 700 million after tax, ZAR 400 million will probably relate to the life business, maybe ZAR 350 million life business. And of that, maybe ZAR 100 million will relate directly to new business. The rest will be your renewal expenses. So it will definitely help and we need to deliver on it. I mean that's going to probably cover 1/3 or -- yes, probably the 1/3 of the missing VNB can be achieved by just delivering on this project, but we do need to get either volumes up versus remaining expenses. We need to maybe launch additional -- and we have launched some products recently quite successfully. It was good market feedback on the new state provider benefit. Yes. So yes, it will help, but it won't answer the full gap. I mean effectively, I think I spoke to you last year, VNB is ZAR 500 million, it needs to be ZAR 1 billion. 1/3 of that gap will probably be covered by this expense project. The other 2/3, we need product level and distribution improvement.

Michael, I'll only add maybe one thought to VNB, and that's actually metropolitan. The largest portion of this is actually metropolitan need to recover in terms of VNB. And I think the very specifically, and we are deeply focusing on that right now is actually the savings product because actually, there's nothing wrong with the market on the funeral cover side. It's actually the savings product. And we need to make some proper decisions about that, either increased pricing, but whatever we need to do in order to fill that gap. And I'm worried about just relying on the product mix and keep on saying we need to sell more of the one and less of the other. Maybe we actually need to be a little bit more drastic than that. But that's literally on our discussion point for Group Exco a week from now to actually look at that in depth and see what we need to do.

Our next question comes from [indiscernible] of Investec.

So I mean, I have 3 questions. The first question, I mean, you've partly answered this. Just on the seasonality of headline earnings. you've -- I mean, you've achieved ZAR 1,759 million, obviously, for the first quarter. If I just simplistically just multiply that by 4, you get to ZAR 7 billion, right? I mean I appreciate there are businesses like short-term insurance that are at the top of the cycle. But how should we think about seasonality, I guess? I mean, is the first quarter a lot more profitable than the other quarters normally? Yes, just a little bit of color on the seasonality of normalized headline earnings should be appreciated. Question 2 is on the short-term insurance business. I'm not sure if you've done this exercise to like, I mean, if we had a normal weather cycle, what kind of normalized headline earnings would you have achieved from the ZAR 157 million you've achieved right now? Just a bit of color on that would be appreciated as well. And then the last question on the health membership growth. I mean, you've achieved 6% for the quarter, which is on the higher side, if you look at like what you achieved in recent history. And I believe a lot of this has to do with the Woolworths business you got in collaboration with the corporate segment of your business. So how should we think about that pipeline in terms of potential further opportunities down the line that you can get similar to Woolworths?

Yes. I'll go and Jeanette can again -- she gets the benefit of getting a minute to think. Okay. So headline earnings shouldn't be that seasonal. Now there are some businesses where there is natural seasonality. So like, for example, in health, majority of our schemes have a fee increase on 1 Jan, okay? So in health, for example, second half tends to be stronger than first half. But across the group, the seasonality should be quite limited. In South Africa, you still get a little bit lower death claims in the winter. So maybe 1Q will normally have a bit less death claims than other quarters. Also, it is a winter month, so there's lack of rain. So at the margin, maybe 1Q, which already reflects most of the winter, could be a little bit better on average. But in my own view, the last few years, it's just been a little bit coincidental that investment markets and bond yields have come down a lot during that quarter. Like I said, we don't have full consolidation for last year, but I'm looking at my own notes here. We did about, let's say, just under ZAR 1.8 billion in the first quarter last year, then let's call it, just under ZAR 1.6 billion in the second quarter and then like just under ZAR 1.5 billion in the following 2 quarters, okay? So last year, we were close to the ZAR 1.5 billion a quarter, except this quarter was a bit better. But yes, so maybe expect 1Q to be a bit better period of winter and the other 3 quarters should then be a bit more similar. Salary increases take place in October. So maybe there's also a bit of a fact that salaries a little bit lower in 1Q and then what can hurt you towards end of the year is when you're doing as well as we are, we had to increase our bonus provisions in the last quarter and the last few years. That's a bit of an internal joke anyway. But obviously, our bonus provisions will fluctuate during the year as well. It's a good question. I mean, seasonality should be modest. Short-term insurance, I mean the claims ratio was, I think, about 44 something for the period, was very low. The premiums for the period would have been what, ZAR 800 million [indiscernible], knock off 10% of the claims ratio, knock off tax. Maybe the earnings would have been closer to ZAR 100 million if we normalize for claims. The funny thing is, obviously, the longer we stay at these very low claims ratios, the greater the debate becomes what is a normalized claims ratio. So I'm sort of adding back 10% a bit willy-nilly here. I do know that insurer and [indiscernible] Board meeting just now. I know insured do have comprehensive attribution back of what they think to be modest weather claims. But from the numbers I've seen, I think they agree that the underlying earnings is close to ZAR 100 million versus the ZAR 150 million we've seen now. And then health, the last point on health it's a good note. We are very happy with the growth in health. And some of the growth does relate to Woolies and the Health for Me product, and there's a few other clients there as well who came on board. So Health for Me is good growth, but we're also seeing growth in our open scheme, which I think is very pleasing. I don't see the open medical scheme market has been a growth market for most players. And we're seeing some good market share gains there. I mean, obviously, the growth rate is still modest, but if you're growing in that market, you're definitely winning market share. And then GEMS, our government scheme continues to grow at a steady clip, which helps. Yes. So we're very happy with the health business. Jeanette, anything to add?

No. I think you've covered it well.

Ladies and gentlemen, our next question comes from Harry Botha of Bank of America Securities.

I think my questions have partly been answered, but I'd like to get a sense of if there was any impact from -- or material impact from positive mortality experience on the earnings outcome in Q1? And then I guess, could you possibly provide a bit more color on the improvements in Momentum Retail's VNB margin? Is that something we can extrapolate going forward?

Yes. Okay. I don't know if you want to answer the VNB and Mom Retail, Rowan or somebody while I look for the mortality splits.

So I think on Mom Retail, as a result of the restructuring on distribution, I think that we've seen significant benefits in the acquisition costs. We're also starting to sort of see the digitization efforts coming through quite strongly. I think the biggest change within Mom Retail is actually a focus on our Investo product. So that's the upfront commission-based investment platform. Largely, that's sort of moving to sort of slightly positive VNB. So I think that -- the efforts from the team are there. It's very much going to be a volume story going forward, but it's one of those areas that continues to get a lot of focus.

Yes. I mean I think what I will add is that Investo, our long-term savings product in retail has always been a source of negative VNB for us. And they've done a lot to offer digital servicing and reduce costs, and that's a permanent savings. So now at least when we do good sales, which actually the sales numbers were great, especially from our own agency force and retail business, it actually is a positive contributor to VNB and not negative as it has been. So it just shows that by focusing on the profitability in the product and not just relying on a sales mix, we're in good territory there. Now it's a matter of volumes, as Rowan has said.

Yes. So I'm just looking here. So Momentum Retail, which is the [indiscernible] mortality profits are about ZAR 50 million higher than last year. So good [indiscernible] market mortality there. Metropolitan was about ZAR 10 million better, positive in both years. So funeral mortality is still slightly above expectations. Corporate is interesting because the experience variance item has declined, but that's because we changed the assumption for long-term margins on -- well, medium-term margins on corporate risk, but the absolute mortality result was still very strong. So maybe a summary would be that affluent retail better, funeral similar, corporate similar. I also picked up an interesting one that on annuities, our mortality profits were a little bit lower, which might look like longevity losses. But I think it relates to the fact that we're not doing proof of life checks as often with home affairs as we used to because we're waiting for that ZAR 10 story to get sorted out. So yes, Jeanette is making her notes here. We need to sort that out at some stage as well. And then in Africa, I'm looking here, Namibia, very similar mortality as last year. Botswana, similar to last year, and then only one left is Lesotho here. Lesotho mortality was better by about ZAR 10 million. So yes, I mean that gives you quite a detailed breakdown. But overall mortality continues to contribute very well to earnings.

Our next question comes from Jaime Gomes of Laurium Capital.

Just one quick question. I'm not sure if it's...

You are breaking up. Can you maybe try to repeat it?

Can you hear me now?

Much better.

Okay. Sorry about that. I've got one quick question. I don't know if it's been directly answered to Harry's question, but can you provide a bit of color as to what happened to risk product volumes within the retail?

Yes. So I think the volumes are marginally down for the year-on-year -- you talking about retail risk products?

Yes, that's correct.

Yes. So the total volumes in retail were up 11%, and I think risk volumes were marginally down, which means your [indiscernible] would have been up sort of mid-teens. We have launched the state provider benefit recently, but it's too early that will start coming through in the second and third quarter numbers. I did see an analyst comment this morning suggesting that our third quarter -- sorry, our first quarter sales volumes might suggest we lost market share during the quarter. We haven't received that input from our own team. Yes. So again, I didn't get the gist of your question, but I can confirm that Myriad volumes are down maybe 2% for the quarter year-on-year.

Our next question comes from [indiscernible].

Yes, I've got to echo what Michael said, some really excellent disclosure, very impressed with that. I have a few questions, and I'm going to split them in parts, if that's all right. So let's start with 2 underwriting margin questions. The first one is, can you speak to the underwriting margin of GGI and to what extent that benefited from good weather claims experience? And number two, can you tell me what the Indian loss ratio was and whether that was elevated during the quarter and how that compares to your long-term targets?

Yes. Okay. So [ Marius, ] I can tell you that the GGI underwriting profit was up quite a bit quarter-on-quarter, which means that -- I mean, I'm looking at the number here, the underwriting margin is comfortably in the double digits. Now motor was good. So that might relate to your comment about good underwriting conditions. Corporate and commercial property were good, so they benefited from the same thing. Also gap cover did a bit better. So gap cover has been a bit under pressure after the -- we had sort of delayed claims through COVID, but gap cover did better. I mean the only area where I think things went a bit backwards was like guarantees. There might have been some construction guarantees called upon here. But underwriting margin is up year-on-year. That's for sure.

And then the benefit was more than just weather because it's kind of across the products, which is great.

Yes. Yes, for sure. I mean there's also like buckets here, Marius, like we're sharing with the sales, that's up quite a bit year-on-year, but I don't have the see-through into exactly what type of sales those are in front of me. But yes, I can basically say commercial property, corporate property, motor, cat cover, all good guarantees, not so good for the period. And then India, the loss ratio was in the high 70s. I'm going to get it to you now. The claims ratio was 79% for the quarter, up from 73% last year same time. I did mention on my call that that's the one factor that's not going as well as expected. I'd rather talk to you about the expense ratio that went from 40% to 32% because of the volumes. Yes. But Marius, I mean that gives you some idea. I mean the loss ratio needs to come down to sort of low to mid-70s for us to make our breakeven for the year.

Okay. And my next question relates to investments. And there are 2 questions here. One is quite positive and the other one is somewhat negative. So the first question is, I mean, traditionally, your platform profits are paper thin. It looks like you are starting to produce platform profits. Is that correct? Is that margin starting to be delivered?

Just to make sure we don't tell you alive. But I mean, my sense is that the answer is yes.

Yes, there's a technicality to it. So Marius, you're right. I mean we made about, I think, a ZAR 50 million profit on the platform for the quarter. But it does include -- how I put this nicely, includes a one-off adjustment for technology project in our favor. I don't think I can say much more than that. I mean it's profitable even without that, but the margins are quite thin. This quarter just benefited from, let's call it, a fee reversal in our favor. Is this enough for you, Marius?

Yes. So yes, we should look for higher margins from that business in the next number of years. My second question is why is your asset management lagging so much? Why are you not increasing own solution assets?

I don't know where you got that from because...

7% versus 22% -- AUM was 7% up and AUA was 21% -- 20% up. So that's where...

Okay. Okay. So you're just saying that under admin is growing faster than under management...

And under management is growing slower than markets.

Boarded quite a big corporate client, and there's been some rebalancing in the life portfolios away from our own solutions that has also had an impact. It's a bit of an own goal, I think.

Okay. You probably heard that. I mean I don't know -- own goal is a strong word, but I do know that we have also moved a bit more assets, for example, when we grow on the guaranteed index products, for example, the money moves from asset management to [ BSM, ] which is a life company manager. Because some of the metrics we follow like the percentage of assets managed on our own solutions by our distribution channels, those have actually also an improving trend. So the AUM decline might have been a function of, let's say, 1 or 2 large corporate clients exiting. I think we also have a U.K. clients who built money.

And then, Marius, we also have had a couple of large institutional platform wins, which are obviously big on assets, very low on margin, which contributed to that. And I think our key imperative is really the curate business which is still really in its infancy. As all on the call are aware, most institutional investors and IFAs are looking for a 3-year track record. And so our anticipation of that vertical integration will really kick through for that business in a couple of years' time. So the focus at the moment remains very much on asset gathering and making sure we get our ducks in a row to affect that vertical integration as the opportunities exist.

Okay. And then finally, can you give us a sense of the covered versus non-covered earnings split change for the investments business quarter -- year-on-year?

Yes, I got it in front of me here. So covered is actually marginally down for the year. And then obviously, asset management is up quite a bit and why is covered down. I mean we got investment variances are significantly lower. So the annuity book did well. There was a positive investment variance of ZAR 50 million, but last year was substantially higher.

Our next question comes from Bradley Moorcroft of Peregrine Capital.

Just one on Momentum Insure. You flagged in the update that new business is tracking below expectations. How is unit count progressing there? And how confident are you that you can get those new business levels up to where you'd like to see them?

Look, I mean, just because I got some details on this from the Board pack last night, I think what is very encouraging for me is that we've actually increased volumes in both Consult by Momentum, which, as you know, is our own independent adviser network, which is actually a channel where we've been completely punching below our weight, which actually says that the changes we've made is starting to come through. We've also seen positive growth in the IFA market. The problem we have is actually in our own BDC channel. And the channel that came across as part of the Forbes acquisition, there's still some kind of internal work that we're doing on fixing that channel. And actually, that's the one that is hurting us most because actually, it is still by far the largest percentage of our sales come from that channel. And we're doing -- we've got new management in, a new person managing that channel. And of course, we're focusing on kind of cleaning it up a little bit. So that has definitely hurt us. I think the positive is that in the IFA market, which we know is almost far more competitive and demanding, we've actually seen some positive growth. So I'll know more after this now because I know that Grant and the team is actually doing a proper presentation on this to the whole Board because it's been a concern of the Board. I'll then know a little bit more, but I think those for me are the green shoots that I'm positive about. I don't know, Risto, whether you want to add something.

Yes. I mean the policy count ended the quarter at 133,000, started the quarter at 136,000. So we lost about 3,000 policies during the quarter. The gross written premiums are basically flat quarter-on-quarter.

But it's certainly below our own targets for insurer. And I think -- I mean, internally, that's what we measure the guys against. It's not really just a year-on-year number. We have ambitious targets for them in terms of gross written premium and new business. And they are short of those own targets at the moment. So I mean, they're very focused on fixing that.

The next question comes from Jarred Houston of All Weather.

Two questions from my side. Can you just give us some detail on the loss in the shareholders segment? I see you have given kind of commentary on some of the areas, but if you can just give us a sense of where the kind of respective split of that ZAR 74 million loss came from? How much kind of is VC write-downs, how much is the other factors? And then my second question is just on the share buybacks. Risto, in your comments, you kind of described the decrease in SCR driven by the dividend and the buybacks. Is it fair to assume the bulk of the buybacks were completed in this quarter given how much that ratio has decreased? Or is there's still quite a bit to go there?

Yes. So remember, the ratio we give you is for Momentum Metropolitan Life, which is the Metlife company. So we paid the dividend to Momentum Group where [indiscernible] networth. So we're busy with the buyback, but the dividend flowed out of the life company into group. So you can think of it as the cash, cash has already been sort of put aside for the buyback, but the buyback itself is nowhere near complete. Slowly, but surely, things come together. Yes, in terms of the loss on shareholder funds, I'm looking here, we had a ZAR 35 million loss on the venture capital fund. And we had central expenses of about ZAR 50 million. And then we had a small positive investment return on the remainder of the portfolio. There was also some property costs here, ZAR 49 million negative. Yes. So to answer your actual question, VC funds minus ZAR 35 million, central costs of minus ZAR 50 million and then property costs offset the interest income on the cash portfolio for the period.

And then some of those central costs, Jarred, were as a result of the share hedge. So the share price reduced over the quarter, which contributed to that number.

Perfect. That's very helpful. And then maybe if I can slip in one more. Just the commentary kind of guides that we'll see some of the benefit of the cost savings program in the latter part of 2026. Is that just the timing of the way we actually see it translate into earnings? I just want to get clarity on how we see that flow through to...

Yes. I think that comment might relate to the fact that we had ZAR 100 million, which is quite a big quarter in terms of cost savings in this quarter. And a lot of that is technology related. So you might have -- it might be like ZAR 25 million a quarter, but maybe you saw ZAR 5 million in the current quarter, and you're going to now see the full amount going later on. Also, there's 1 or 2 big projects that are nearing completion, such as the duplication project in one of the areas. Yes. So you'll see a bigger impact. What I would say that VNB, the question earlier by somebody, was Michael or somebody, obviously, that will only come into play once we make an assumption change at year-end in the next year's VNB number. It is actually one of the reasons why Jeanette keeps driving me on the project is that we need to get as much savings this year as possible as an opening assumption in next year's VNB. So we need to try to get as much of the expense savings in this year as possible.

And then just quickly to Michael's question to Risto around the PVNBP multiple. We do use opening yield curves, as Risto explained. So the June '24 curves and the June '25 curves weren't significantly different. And a large part of that multiple really comes off the single premiums and obviously, the yield curve doesn't sort of change there. So the big volumes that come through in investments and come through in corporate sort of do affect that number. But Michael, we'll unpack it by business unit for you.

Ladies and gentlemen, with no further questions in the question queue, we have reached the end of the Q&A session. I will now hand back for closing remarks.

Thanks, everyone. I don't have any massive closing remarks, except to say thank you. I mean this was a great call. I think the one thing that is clear is the more we disclose, the more interactive the call is and so on. And I mean, we quite enjoyed it. So thanks for the compliments on that. We will keep it up. I think it is important to us to always disclose as much as we can. And now that we're kind of well into the IFRS rhythm, I think you can bargain on it that this will continue the way in which we do the disclosure. But I mean, thank you. I think we got some great questions and great interaction, and we really enjoyed it. If you have further questions, please feel free to e-mail Rowan and Abdur, and we'll do our best to get back to you on that. So thank you very much.

Thank you, ma'am. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.