Momentum Group Limited (MTM) Earnings Call Transcript & Summary

Good day, everyone. My name is Dan Moyane, and I'm your program director for the next hour. So welcome to the presentation of the year-end results of Momentum Metropolitan Holdings for the period ended the 30 June 2021. As we begin this presentation this morning, we've just shared with you a company video calling on all of us to get vaccinated. Basically, it's got a very simple message, that the more people get vaccinated quicker, the sooner we will be able to reduce the impact of the pandemic on our lives, the economy and the rest of society. Thank you very much, Damian McHugh from Momentum Metropolitan Health Solutions, for reminding us of the importance of vaccinating, also sharing with us a very few key aspects in those 2 minutes or so and telling us how easy it is to register online, to book online and access the Momentum Metropolitan's vaccination sites in different parts of the country. In fact, one of those sites is right here where we are broadcasting these year-end results from. We are coming to you live from the company's Sandton offices in a building called the MARC, at the corner of Maude and Rivonia Streets. The vaccination site itself, I've seen it myself this morning, walking in here. It's well-organized, it's easy to access and looks like it's operating very smoothly. Well done, in fact to Hannes Viljoen and the team at Momentum Metropolitan Health Solutions. And everybody else in the company who's been involved in setting up the 5 vaccination sites of the group in different parts of the country, [ Reale Buha ], [ Bia Danke ]. Now on that thank you note, let's get down to today's business. Again, I welcome everyone, and thank you for joining us, the analysts, the investors, shareholders, Board directors, some of them who might be joining us virtually, journalists. And of course, the employees of the company, some of whom I understand might be watching this broadcast this hour together with their families from home. Thank you very much for your support. We are live, of course, on Business Day television. That's BDTV. It's on DSTV Channel 412 and live webcast as well on that's via corpcam.com. You want to get there, you just put that /mm, that's mm, and today's date 08/09/2021. Now the full results of course can also be downloaded on the company's website, momentummetropolitan.co.za. Thank you very much to the Momentum Metropolitan Group Investor Relations team for having put together this presentation and the Momentum Metropolitan Marketing Group -- Group Marketing's PR and events team for a job well done. Look at this set, it looks very lovely, it's beautiful. Now these year-end results are like a tale of 2 cities, if you may. On the one extreme, there has been higher-than-expected mortality, death claims have soared. The pandemic is taking lives, claims are coming in and we're paying. Momentum Metropolitan, of course, is largely a life company, as we know, and that means it pays claims. And we should expect to see a lot of that during a deadly pandemic like the current one. Of course, the full story, as you will see is in the numbers that you are about to get here. On the other extreme, the group has achieved excellent new business performance with a couple of records, for example, in Momentum Investments, which is headed by Jeanette Marais; in Metropolitan Life, which is headed by Peter Tshiguvho. The increase in new business volumes, I think, underlines the fact that risk-averse clients are looking for security nowadays and the group with its strong balance sheet provides that. Therefore they are coming to us and the market share is growing. And group finance director Risto Ketola will focus on some of the key indicators this morning as he will further unpack the results for you backing up the statement that the group strategy is on track. But first the group Chief Executive Officer, Hillie Meyer, will explain how the growth in new business volumes for example is largely as a result of the group's successful reset and growth strategy, which renewed external focus of the group in 2018. Now under Hillie's leadership, research and grow has now been completed leading to stellar operational performance despite COVID-19 challenges and the difficult conditions. And it's built a good foundation for the road ahead for the group. And in that regard Hillie will also share with you this morning about the new strategy Reinvent and Grow that talks about new things that are coming up, which, of course, I understand has received by in across the group. Now before I ask Hillie to come up shortly and make his presentation, let me advise all of you that after Hillie and Risto have completed their presentation, we will spend about 10 or so minutes addressing some of the questions that may have come through via the webcast platform, if there are any. But of course, as usual, there is always that opportunity to tackle some of the more technical matters in the one-on-one sessions with analysts, which I understand they've been prearranged by the investor relations team. And the media thanks to Anneke Hanekom and the PR team will also get a chance to ask their questions in prearranged interviews this afternoon. Well, that's it from me for now. Now let's welcome Hillie to the podium to take you through his presentation and that will be followed by Risto. Thank you. Hillie?

Thank you, Dan. That was a excellent executive summary. Ladies and gentlemen, welcome to our annual result presentation and thank you very much for your interest. On world standard, South Africa I think is one of the poorest performers when it comes to the impact of the COVID pandemic on the country. We're amongst the worst-performing countries and I think it boils down to the pace at which we actually rolled out vaccinations. We all know the shortages and the slow start that we had. And when we presented our internal results 6 months ago, I actually made the point and -- yes, made the point that we probably need to do 10 million vaccinations per month. Now yesterday, I understand we did around 200,000. That translates into about 4 million per month. The best week or day we had was 280,000 vaccinations per day. That translates into perhaps 6 million a month. So we're nowhere near the 10 million that we probably need to do if we really want to mitigate the impact of the fourth wave, which is on its way. And as a country, we owe it to ourselves to be better prepared for the fourth wave than we were for the third wave. Closer to home, 6 months ago, I informed all our investors and other interested parties that we lost 25 of our colleagues as a result of COVID. That number has now grown to 39 of our staff members. Obviously, we, also, as Dan mentioned, lots of our clients that passed away and I think I'd like to take this opportunity to offer our heartfelt condolences to their families and friends of those that are not with us anymore. We actually quite happy with progress our own efforts of vaccination are on-store for clients and the wider community. We're very active. We really -- in the video earlier, we promoted our vaccination centers. At the moment, if we extrapolate the health scheme members working for us, our own health scheme members, that we had about 73% of our staff members are vaccinated. That's not where we want to be, but it's, I don't know, more than double the national average. So it's probably not a bad start. I will quickly talk about some of the major features. That's what we call the sort of year of extremes. After that, I will just wrap up Reset and Grow and then rest of my presentation, we'll talk about the new strategy and our plans for 2021 to 2024. Now it really was a year of extremes, as Dan said, a tale of 2 cities. And there's actually only one real negative thing about the past year, and that's COVID and the impact of COVID. I mean this slide shows our gross claims in South Africa and because of the impact of COVID, it's more or less double what it would be in a normal year. You can see around ZAR 5.5 billion the preceding 3 years and almost ZAR 11 billion in this financial year. Now you will understand that that will clearly impact our earnings, I mean, obviously, things like reinsurance help. And those numbers are before tax. But still the bottom line is that we suffered a 31% drop in normalized headline earnings, and that's on top of a significant drop in normalized headline earnings last year already because of COVID. But yes, ZAR 1 billion in normalized headline earnings, which is significantly less than say about ZAR 3.5 billion, which we would do in a normal year. But there are also the other extremes. One of the things that we're most proud about is our new business. Here, it's illustrated by a present value of new business premiums, which sort of combines recurring premiums and single premiums, and that's a growth of 31%. The best performer in the group was investments. There, the growth was more than 50%, the new business growth. Metropolitan was not far behind with 25% growth in new business volumes. So from a new business point of view, excellent results. And I think especially considering the time that we're in. So under current circumstances, we, I think, are more than pleased with the new business performance. Obviously, because of the excellent gearing, it impacts the value of new business. So from quite a low base, we performed very well. But I think ZAR 725 million of value of new business is actually quite an achievement. I think there's room for improvement. We can see it grow further. The new business margin is about 1.1%. So we're not where we want to be. But our current circumstances really, really, very, very happy. I think one of the other highlights of the year is Momentum Insure, where we basically now very successfully integrated the Alexander Forbes business we acquired. And the power of one is now one brand, one set of -- one product set, one client value proposition, one management team. We really did very, very well in integrating our efforts. Still a bit of work that remain, which I'll deal with in our future plans. And also, it's probably the last time that we're going to have the opportunity to talk about Momentum Short-Term Insurance, the original MSTI business that we had before we acquired and before we merged with AFI in future that we'll report on the combined business. But MSTI on its own actually turned profitable this year, which is also a very pleasing outcome. I mentioned that Metropolitan is going from strength to strength. In terms of average policies per week per adviser, they keep on breaking records. In fact, the 2.84 policies per week per advisor is higher than it's ever been in Metropolitan's history. Another highlight is something we worked on very, very hard and very glad to see that we actually ultimately getting the rewards now is PHI underwriting. We've -- you will see there that that's a meaningful profit for this year. It was helped by COVID because I mean some people that would have maybe be disabled and received an income passed away. So -- but that explains about 1/3 of the profits. So through hard work and better pricing and management of the sicknesses and so forth, I think we've really turned the corner on PHI. Guardrisk going from strength to strength. I think the nice thing this year in terms of revenue, the first time that they broke through the ZAR 1 billion mark. But you can see the consistent growth. And considering COVID-19 and the impact of that, I think this is really impressive, not even a blip. I think just as a last slide to just illustrate how extreme the circumstances are and to remind everybody that we're doing all of this with 10% of our people actually going to the office. So we do all of this most of our people working from home. And that is in spite of power failures and some bandwidth challenges and whatever else. And it just again it reminds us how abnormal the current circumstances are. And how nice it would if we can return to a slightly more normal world. Right. As far as Reset and Grow, as we said, we basically concluded that. That was the strategy that we announced in 2018. This is the signature slide that sort of summarizes what Reset and Grow was all about. On the Reset side, we had to fix the basics. We had to address the cost base. And on the Grow side, we wanted more of an external focus and that was a focus on service, products, distribution, marketing and so forth. And from a financial point of view, we targeted normalized headline earnings of ZAR 3.6 billion to ZAR 4 billion. Now clearly, the normalized headline earnings, we missed that by a long shot. I think the heartening thing is if you actually adjust for the impact of COVID, and Risto will explain it in a bit more detail, there we got very close to the ZAR 3.6 billion. In fact, I mean, if you adjust for that, our normalized headline earnings would be around ZAR 3.5 billion. I would just like very briefly remind everybody just what we aimed for in COVID-19 and happy to say that from an operational point of view and a strategic point of view, we actually achieved what we set out to do. And what was Reset and Grow all about? It was basically getting our competitive spirit back and about the common vision and alignment behind the strategy, and that was a big tick for that. It was about empowerment and accountability and unleashing sort of federal business units to actually go and do what's necessary and what's right out there, and we've seen the results of that. It was about financial discipline. Yes, cost efficiencies, cost savings, watching the bottom line, but also great strides in our capital management and cutting out mistakes and being more careful about how we use our money. And again, you'll see in Reinvent and Grow we're actually taking that a step further, a level further going forward. It was also about focusing on clients and intermediaries advisers and really getting that external focus going so that we can win back market share, and you've seen our new business results. So again, I think a big tick there. It was about championing our brands, especially the 2 big consumer brands Momentum and Metropolitan. And again, if you look at the results and stats and surveys, I think we've done very, very well. And finally, it was just about making Momentum Metropolitan proud again. And as I stand here, I am very, very proud of what we've achieved. And I think everybody in the company can be proud of what we've achieved. So that is the end of Reset and Grow. Over to Reinvent and Grow. We're probably changing gears here. If Reset and Grow was about continuing doing what we did but doing it better, Reinvent and Grow is about doing things differently and also doing different things. Now we're not moving away from empowered business units, and the whole strategy is actually was -- the whole strategy review was done in those or by those business units, looking at trends and so forth. And -- but from the center, we obviously had some standards and requirements, and we obviously participated in the whole process. And we basically won our empowered businesses to basically be best-in-class, either be one of the best in this segment or at least strive to be the best with a meaningful chance of getting there. We want value creation in terms of real earnings growth and return on equity. And then obviously sustainable earnings and a sustainable business. And that means we do that through group diversification, new initiatives, but also digital transformation and then sound governance all around. This is our sort of a summary of Reinvent and Grow, what it's all about. And I'll quickly run through the different bubbles on the slide because each one of those bubbles represent almost a theme that is encapsulated in our strategy. We've got to keep on focusing on our existing channels. There are some very strong channels and there's definite opportunity to grow and improve. So the focus will not be removed there. We can do a lot better. But we will start doing things differently. We will renew even in those channels. We will establish new channels. I think there are -- there is definitely a need on that score, we're probably a little behind, but I think we -- and I hope that we'll catch up quickly, but -- and there are a number of exciting initiatives, but we need to look at other means and ways of actually reaching clients and attracting clients. Digital is a big, big, big theme. Over the next few years, we've got a master digital, and we're determined to do that. And then product and service leadership. Products and services are becoming more and more integrated. The distinction between what -- when is something a product or when is service becoming less and less, and technology plays a role there, and we actually want to be a leader on that score. And finally, transformation is important for this business. We want to be a truly -- or we are a truly South African company, and we've got to reflect society, and we actually have some very different plans to do that. On the -- looking at the red bubbles, those represent probably more sort of targets. We're setting a normalized headline earnings target for 2024 of ZAR 5 billion. That's the intent. Obviously, we need things to return to some form of normality, otherwise that would not be possible. But I mean, we're quite determined that we think it is possible. There will be -- we anticipate at least ZAR 500 million of cost efficiencies coming through. It's not really a cost-efficiency drive, but the digital initiatives will actually result in some cost-efficiencies. Non-Life, that's Guardrisk and Momentum Insure will continue to grow and will continue to grow faster than maybe some of the bigger traditional parts of the business. And we foresee that will represent 20% of normalized headline earnings in 2024. And then finally, we've got some market share growth targets. It differs from business to business. On average, it's probably between 2% and 3%. But it's in the realization of the fact that the market itself is not really growing. So if we actually want to increase and grow, we need to grow market share. And then finally, we've got a return on equity target of 20%, which I believe will be a significant achievement and probably amongst the best, if not the best in our industry. I will now on a sort of a business-by-business level deal with some of the detail in the Reinvent and Grow strategy. But before I go to the businesses, just quickly on transformation itself, obviously, we're proud about our level 1 status and we're determined to retain that. But I think more importantly for us, is our own staff and our employment equity in our business itself. And currently, if you look at the senior, the most senior groups in the company, 30% of our colleagues are Asian, colored and Indian. And that's just simply not good enough. It's not good enough today. And we're targeting 50% in 4 years' time which will hardly be good enough in 2025. But a 5% improvement per year over the next 4 years I think will be a move in the right direction. And I think if we get to 50%, we probably would have reached a tipping point, and I think things will become easier and more natural after that. So in that school, quite determined. We've got targets again, like our -- all our other targets, a bottom-up process. So all the business units have their targets, and I'm pretty confident that they'll work at it. Right. Starting with Africa. Africa is quite ambitious in our strategy in the next 5 years. You can see that they want to grow the cells significantly. They basically want to double their normalized headline earnings. That will be 10% of our normalized headline earnings in 2024, which will be very, very welcome. And VNB is quite a challenge in Africa because of the lack of scale. And yes, ZAR 35 million will be probably the minimum that we should strive for, but it's not -- it will not be a walk in the park. Momentum Life, we expect a lot there. Myriad wants to grow market share in the IFA space. They get most of their business from independent financial advisers. So that growth from 16% to 20% of market share I think will be significant. They want to in the process, at the same time, increase the margin and they've got some I think exciting plans to get there. Investo, one of the more traditional products, which we are modernizing as we move along, again, there also we want to increase market share, and we're actually going to streamline processes, using sort of digital capabilities and so forth, just to provide a much more self-service-type service to our clients, and we can reduce the cost base by 20%, which we need to do if we want our investor product to be really -- to really offer good value for money. Momentum Investments, again, some very ambitious plans here. I think one of the biggest, biggest initiatives in Investments is a re-platforming of our wealth platform. We're actually at the point now where we need to do that. So that's a significant investment, significant project, and it will really set us up for I think some efficiencies and service and engagement with suppliers as well as our advisers. It will put us in a -- I think in a very good position to cut out a lot of the things that we struggle with currently and that almost like takes a lot of manual work to provide good service in this area. So we're quite excited about that big project. You will see there in terms of gross written premium on the retail side, significant growth objectives. Institutional business, which this year even had a net outflow, we want a meaningful net inflow by 2024. Same with the U.K. business. And institutional business also want to improve their cost-to-income ratio. On our advice channels, these are the current advice channels, distribution service, that's the broker side. There's a whole reorganization happening as we speak to basically align ourselves better with the market out there where brokers are and advisers are more and more specialized. And we want to adapt to that. And we think we actually got some great plans that will improve our alignment. So even where we had a excellent performance and we're doing very, very well, we actually think we can change and through that change even align better with IFAs. Because all our plans and things we implement, we believe there will be a growth of annual premium equivalent as well as a improvement in cost efficiencies. Momentum Consult say a similar story, currently 300 advisers. The guys want to grow that to 450. They want to double the assets under management in the consult solution. So I think that's quite challenging and exciting. Momentum Financial Planning, our direct advisers, growth targets there, growth in APE as well as footprint and also some cost-efficiency improvements. Again, yes, it's not that apparent in this slide, but there's a lot of digitalization in creating the kind of platforms that will allow us to provide services on a much more streamlined basis going forward. Momentum Corporate, our funds at work is our flagship umbrella fund. There we want to grow our assets under management from ZAR 60 billion to ZAR 80 billion. And we want to increase digital member engagement from about 50% of engagements to 80% over the next few years. And I think once you're at 80%, it's probably not that difficult to then get to the final sort of 20%, although normally the final bit is the most difficult. Other exciting things or challenging things that Corporate plan, they want to improve their cost-to-income ratio. I think we just realized that the old analogy we used to use is sort of a truck and load. We just need to sort of work a little bit on the size of the truck relative to the size of the business that we write on a regular basis. It will I think improve our margins generally and also our VNB. So yes, I think some exciting and interesting and challenging things in Corporate. On the health side, there we're targeting some growth numbers in the open schemes. We basically want to add 100,000 members. We're not as big as we really should be and want to be and need to be. And considering I think the great product we have, we should actually end up with that growth. It will not be easy, I can tell you that. The public sector, there's still some growth. On the one hand, you want the public sector to shrink. On the other hand, we actually want because not all the public sector staff members are on [indiscernible] yet. So we want to offer a better service there and grow the client base. And then corporate clients, corporate schemes is also grow there. And also digital plays a role that's going to bring efficiencies. Metropolitan Life, again, the guys are now on top of the game. They're prepared to be a bit more bold in the targets. We had to turn some of the targets a bit down. So internally, the targets are higher than this. Peter, I hope you're watching. APE from ZAR 2 billion to ZAR 3 billion, that will be quite something. Also keep in mind, we're still busy with the migration from some of the old Metropolitan systems onto our new systems. And over the next 3 years, the final migration of the final group of traditional policies will take place. I think it's about going to be close to -- how many policies? Million.

Bit less.

Okay. 800,000 or 900,000 policies, which would be a major exercise and it will result in savings. There are also some digitization plans. And then there's Metropolitan GetUp, which is one of these new channels that we are working on and exploring. And it's interesting. If I just share a little bit of what GetUp is up to, it's basically a direct-to-client channel, and it is using bots to do this, to engage with clients. Now currently they do about 2,000 policies per month. And to put that in context, Metropolitan in the core business got 33 regions. And the GetUp initiative in terms of number of policies do what a good region would do, call it 133rd of what Metropolitan's core is doing. That's on a gross basis. Their persistency is not as good as the traditional business. So on a net basis, they probably average region. And then if you also bring into the equation the size of the policy, on average the policy size is a bit smaller, then GetUp is probably closer to a small region, but it is growing all the time. And the nice thing about a bot, a bot, they work 24 hours a day. They don't get tired, they don't have performance anxiety, they're immune to COVID. The list goes on, but again, a double-edged sword. It's not yet an immediate threat to I think some of the traditional stuff because I mean, we just see that these digital things, it's more difficult to hang on to your clients. They come, but they go easily. And also, I mean, remember here, we're targeting the younger market, the millennials. And the guys after -- I can use my kids as an example, after they've paid for the Uber trips and the cell phone and what are all the other things, there's not that much left for financial services. But yes, I think it is the way to go. Guardrisk, you've seen how they keep on performing, and they're not going to let up. Guardrisk set as an ambition in 2018 that they would like to double their normalized headline earnings. They're on their way to achieve that. That will take them to ZAR 500 million in 2024. We're going to continue increasing our underwriting profits. That's where we basically write on our promoter license, the proprietary underwriting that we do from 26% to 33%. And also Guardrisk was successful in acquiring or getting approval for a micro-insurance cell captive license. Lots of opportunities there, quite a fair bit of activity. And I think we're very close to really getting going on micro-insurance. So that's an exciting initiative. If we just look at Non-Life and Life respectively, the 2 cell captive businesses, you'll see the growth in net revenue that they're targeting from ZAR 800 million to ZAR 1.1 billion and from ZAR 250 million to ZAR 300 million. Finally, Momentum Insure, our short-term personal lines business, they're going to complete the Alexander Forbes integration. This is really, they're almost like the back-office integration, getting all the stuff on one license, which they would like to do in the coming year. And then at the end, the merger would give us a sort of cumulative synergies of about ZAR 160 million per annum, which was one of the attractions and one of the reasons why we did the business. They've got their growth plans, they want to double their normalized headline earnings. You'll see a lot of that doubling of normalized headline earnings are these efficiencies coming through. And also, Momentum Insure -- and they've started on that road, they're quite determined to have a distinctive client value proposition, and it's anchored in safety. And I think it is a compelling story, and I'm sure it's going to be successful for them. I'll conclude by maybe just from a -- share with investors in terms of our strategy going forward how confident are we -- or I'd rather say how confident am I that we can achieve these targets. I mean, it's quite ambitious. I've only given you a flavor. It's a bit number-based, there's a lot more behind it. I'm actually quite confident and I'm confident for a number of reasons. I think the first one is the strategy is grounded in reality. I think we actually honestly took on board some of our weaknesses, some of the things that we need to do differently and do better. And I think that's one of the things where we actually get a lot of our, call it energy and determination from is we face up to our own weaknesses. And I think it sort of energizes us and our strive to actually improve on those things. And that was apparent in all the strategies and the strategic reviews of the different businesses. So I think the honesty and realism was there. I think another important -- I think what gives me confidence, we're not relying on one big idea. There are lots of initiatives, lots of small bets and lots of little teams motivated working on these things. And I always prefer that to doing sort of one big bet in one place. I think another important factor is we settled through Reset and Grow, I think the business has stabilized. I think a lot of things -- we're not starting Reinvent and Grow from scratch. I think a lot of things are in place already. We're starting from a good position. Some of the building blocks are there. So I'm quite sure some of these, especially digitalization initiatives, will actually come on-stream pretty quickly. And then finally, I think because of the way in which we run this business where business owners actually develop these strategies, set their targets, whatever, there's buy-in, and there's just a natural motivation. I think people just like it if they can actually make their own plans and then deliver on their own promises. So with that, thank you very much, ladies and gentlemen. I'll hand you over to Risto Ketola.

Thanks, Hillie. Yes. I don't know if you saw where Hillie said it's about 1 million policies and then I went. The actual number is 840,000. It shows the difference in the CEO and the FD, like he runs everything in the nearest million. To me, just sounded a bit different to 1 million, but I could have left your alone now that I think of it, the 1 million was just fine, 840,000 is close enough. Okay. So I'll talk through the financial results high level as usual. Then the 3 deep dives this time around. First one is pretty obvious, which is COVID-19. I'll talk about that. The next one I'm going to talk about quite a big jump in our non-COVID valuations in our EV. That's a technical way of saying we actually did very well outside of the life insurance businesses. So I'll talk a little bit about that. And in the last section, I'm going to talk about Guardrisk's capital position and the group capital position. It's really the first time we're giving this detail. But I think as Guardrisk is growing and now that we are a regulated insurance group by the regulator, I think it's important we start giving that detail. The marketing guys told me those slides are very technical, and that made me smile because I knew, okay, the analysts will love it then, okay? Okay. All right. Okay. Let's talk about financial results. So some of the big picture results. As Hillie said, our earnings are ZAR 1.7 billion for the year. The impact of COVID alone was about ZAR 2,8 billion here. So COVID-19 mortality experience and provisions basically absorbed about 75% of profits we would normally make. I mean from a earnings perspective, this has been a massive, massive impact on our group. At the same time, we did still make ZAR 1 billion after tax and after investments in new initiatives and everything else. I think the point I want to stress here that the COVID-19 pandemic, it's been terrible to our earnings, but it has no impact on our solvency or our capital strength. I think we are at that level of claims at this stage. Then also Hillie did say that new business was very strong, 31% up. VNB similarly. The VNB went up more than volumes because we also saw good business mix effects. So we did generally see the business units migrating towards higher-margin products. We're also seeing the benefits of the years and years of cost-efficiency. Part of that cost savings is around the new business initiatives or new business activities and also the reduction in your unit cost and your normal renewal expenses. So we mustn't underestimate the impact of cost, let's call it careful spending of our money as we would like to say internally and the impact on VNB. New business margin has improved. It's actually above the pre-COVID levels, which is a positive surprise. Then some other key numbers. Our embedded value is up year-on-year, so ZAR 27 roughly the embedded value in June. It's important to realize that the COVID-19 claims and provisions took about ZAR 2 per share out of the embedded value. So again, if you adjust for EV -- sorry, if you adjust for the COVID in the embedded value, it would have grown by maybe ZAR 3.5 rather than the ZAR 1.50 or whatever the number was. So I think you're going to get a bit bored because it's almost impossible to say anything about the financial results without referring to COVID. That's the unfortunate reality in the current year. Dividends, we maintained our dividends at ZAR 0.40 per share. I will talk about some of the thinking behind that. Obviously, results were a bit worse this year than last year. But at the same time, a lot of the capital work Hillie spoke about meant we were sitting with very good cash balances at the center, and we decided to distribute some of that. And also if you look at the last 2 years, in all honestly, I think paying ZAR 0.40 a year for the last 2 years compared to ZAR 0.70 pre-COVID is again not a massive drop-off. I think we have tried to be as fair to our shareholders as possible. We continue paying a fair dividend through the prices. ROEV, that's really the growth in EV plus dividends added back. I will show later that we actually have positive investment markets for the first time in years. So as much as I complain about COVID-19, I think we need to acknowledge that the stock market was actually quite good for the last 12 months. So that helped that number quite a bit. ROE down to about 5%. What's maybe more important is that Hillie's 20% remains our target for F '24. I mean the ROE is going to reflect current earnings, but all the capital work we're doing and outlook for earnings, we still think the 20% is a ambitious but realistic target down the line. Okay. So the book -- the actual results announcement has a lot of detail by business unit. I have decided again not to have a slide business unit, I already spend a couple of minutes on this slide. These are what I would call our mature businesses. I think the 2 businesses that are really hit hard by COVID was Momentum Life and Momentum Corporate. I think Momentum Corporate, we almost expected it 12 months ago that it will be bad. I think Momentum Life did surprise us on the downside in terms of extent of the claims as the year unfolded. Just to put some numbers there, Momentum Life's earnings have a ZAR 1.1 billion impact from COVID-19 alone. Momentum Corporate is over ZAR 1 billion as well. So if we add back just the COVID claims, both of these businesses would have been comfortably profitable and Momentum Corporate actually would have had quite a good year if we add back COVID claims. Momentum Life would have had a average year even if we add back the COVID claims. There's 2 other factors worth noting. One thing is that this business is quite sensitive to interest rate yield curve movements, and those were negative in the current year. That impacted earnings by about ZAR 500 million negative. And there's also an interesting thing where we are seeing our lapse rates actually being lower than we expected. And on some policies, that is a negative. And in the current environment, we just felt that policies where clients canceling would almost benefit us, that's not going to happen during the pandemic. I mean, I think people who have very favorably-priced insurance contracts will keep those as much as they can. So we have taken additional provisions for lower-than-expected lapses, which is another ZAR 300 million or so. The counterpoint to Momentum Life is Momentum Investments. I don't know when we're going to see ZAR 1 billion of profit again. I mean that's a exceptional number. The same way Momentum Life was hit by certain yield curve movements, Momentum investments gained a little bit. So there is a bit of a natural hedge between the annuity book and the risk book that is not fully -- when you look at it by segment-by-segment, you don't really see that hedge nicely. On top of that, the investment returns on the book from a credit perspective were good as well. So we only had one real material impairment during the year. And finally, COVID unfortunately also resulted in some additional deaths of annuitants which financially is actually a positive for us. So that's about ZAR 100 million benefit in that ZAR 1 billion. I'm talking a lot about the annuity book because it really drove the big jump. But behind the scenes, the pure asset management business also did a lot better. So rising markets, good inflows. So I think we mustn't forget that part of investments is also the core alpha sort of business there and they also did well. Metropolitan Life, investments get -- is getting all the highlight reel there, but I think Metropolitan Life also deserves a bit of credit because in that ZAR 435 million profit, there's ZAR 0.5 billion impact from COVID. So had it not been for COVID, MetLife would have also had a career year. Persistency is better than before, which is also quite fascinating in the current economic environment, maybe shows the value people put on their life insurance right now. Expense management remains excellent. Expenses are pretty much flat year-on-year despite the expansion in the cells activities. And lastly, the quality of the business they're writing is also very different to a couple of years ago. And because of that very good margin in the business, even in the first year, there's a nice contribution to earnings coming through. Okay. So I think MetLife, yes, they had their businesses in a good spot. Momentum Corporate, I mentioned over ZAR 1 billion of COVID claims. This business did benefit from rising markets a bit more than a lot of the others. So as a lot of our Smooth Bonus business sits in Corporate, so the reduction in guarantee reserves helped the earnings a little bit. And also the PHI, I think that Hillie mentioned, that also had a positive impact on profits. Health, we don't -- we often don't talk about health enough. I mean it's a massive business. It's a tight-margin business. So it's quite small from a earnings perspective. But in terms of staff numbers and activity levels, it is one of our biggest businesses. There, the profitability is up for probably 3 key reasons. The one thing is GEMS is a big client of us, and it's a very thin margin business, but I think health does an excellent job of extracting improving operating margins. I think it's a situation that works for both us and the client in that they're paying us modest fees, and we're squeezing as hard as we can to try and make a profit out of that. So I think the GEMS contract is in a healthy shape within health. The -- okay, expense management is another important one. But the last point is [ Health for Me ], which is a low-income health product, a basic health product. The growth there is phenomenal. There's massive demand in the market out there for a low-cost medical solution. And I think we hit the sweet spot here and the sales are strong, and it's also profitable for us. So when we talk about EV later, you can see we put part of modest valuation on that because it's quite new and we don't quite know how the regulations are going to develop over time in terms of low-cost health. But as -- under the current regulatory regime, I think we have an excellent product that is in good demand there. Then moving on to the growing businesses. They're all growing, but these are maybe growing faster. Non-Life insurance, that combines Guardrisk and Momentum Insure. The big reason for that jump year-on-year is first 12-month result of the old Alexander Forbes Insurance business. Last year, they were in for 5 months. This year, they're in for 12 months. Beyond that, Guardrisk also had good growth for the year. Guardrisk again managed to grow earnings by more than 13%. And that is despite the fact that they also didn't have a totally paying this year. I mean, I think Guardrisk handled business deduction very well, but there was a need to increase provisions a little bit there. There was also a default by one of the premium collection agencies. So despite a difficult environment, Guardrisk grew by 13%. And Hillie also showed that MSTI -- it's getting a bit forgotten in all those, a lot of activity in this segment, but MSTI also had a good year. Africa. Africa was looking quite strong through 9 months but ended the year a little bit down. We have seen COVID claims pick up a lot in our neighboring countries, Botswana, Lesotho and Namibia in the last quarter. So I think the early waves, our neighboring countries weren't as affected as South Africa, but now they're affected at least as strong as South Africa. So we had quite bad mortality results in the last quarter in Africa. And also in the Namibia business, we had some book shrinkage over the last few years because the Namibian economy I think has been a recession for 4, 5 years. So we had to increase expense assumptions there. And the last point is a positive point in my eyes. We did take ZAR 1 billion of special dividends out of all these African countries, and that resulted in a ZAR 40 million dividend withholding tax payable, which is in that decline of 19%. New initiatives. As we had planned, the losses of new initiatives narrowed quite a bit over the year. India losses narrowed ZAR 60 million for the year. So that business has been delivering the business plan. Obviously, just in the last few months, the COVID claims have been quite high, but not high enough that it will be that material at group level. I think it does delay the J-curve in India a little bit, but the limits on the benefits and the fact that they sell a lot of other stand-alone products as well, I don't think the COVID impact from India is going to be anywhere in the same -- well, it's not going to be nowhere near the same scale as what we're seeing in South Africa from a financial perspective to us. The other one that improved a lot is [ IO ]. So our losses on IO narrowed a lot. And we have actually recently sold our remaining stake in IO. So those losses will not be there next year at all. Shareholders is a bit of a volatile thing because we include lot of our alternative investments as part of the shareholder segment and portfolio. And I'll talk about that later, but we had very good returns on alternative investments during the year, which explains the year-on-year movement. Okay. Sales, I probably don't need to recap too much because Hillie spoke about some of these. But I quite like this quarterly view in that I distinctly remember 2019 at first quarter when we had a massive annuity number. And we spent like all our time telling people this is never to be repeated. I don't think of this as being realistic forever. And we actually now beat it last quarter. We didn't have a single large case and we outdid that quarter from 2 years ago when we had 1/3 of the business from a single client. I think also if you look at even the pre-COVID quarters, which is sort of Q3, Q2 last year, it's like a step change. I mean the volumes are just 20%, 30% higher every month. And that has actually continued subsequent to the year-end. So there has been a real step change. And before any wisecracks say it's because we're under-pricing or whatever, the reality is that the VNB is also very strong. So I drew a little red box there because I think we always sort of thought that 150 VNB a quarter would be a good number. In reality, our view is now changed to 200. So we're consistently printing about 200 of VNB every quarter. Yes. And again, like I said, I don't -- being a finance guy, I'm a bit nervous what the next jump up is, but I think we can at least maintain this new level of profitability on new business. And that is having a positive impact on new business margins. As I said, our margin is now higher than it was in 2019, which was the last pre-COVID year. I think the business units that have really made a big impact here is Metropolitan Life. As I say, the quality of business, the efficiency, i.e., the cost per cell and also the mix of business being more risk has really helped here. And Momentum Investments, in the space it plays, you probably can't expect the margin to improve much further from there. I think that margin is already, let's call it, pretty optimal. The areas where we can improve margin further I think is Momentum Life. Hillie was showing earlier that on the risk products, the guys think they can do a lot better. And then Corporate, very slow the market at the moment. I was a bit surprised when I've been looking at some of the data we have internally and published by competitors. Even though Corporate volumes are down year-on-year, to me it looks like the market share is stable or up. I think there's very little activity in the Corporate space. I think companies are quite hesitant to change employee benefit providers currently, maybe because of the high level of claims and so on. It's a bit tricky. There's very little activity there. And then Africa, as Hillie said, the business is improving all the time, particularly in management of the [ in-force ] book, and let's call it the operational excellence in that business. But on the new business side, we do need to find the right mix of volumes and expenses. I will think a lot of people don't realize about Africa is people often compare to Metropolitan Life. That's not really fair. We sell a lot more savings in Africa, whereas Metropolitan Life tends to be a lot more focused on funeral. So the business mix, like in Namibia, for example, is nothing comparable to a Metropolitan Life. It's probably closer to like a [ MOM ] life in terms of business mix. Okay. Embedded value. Just one brief slide here. I drew a red box around operational variance, which is slightly negative for the year, operational performance, embedded value profit. We speak so much about COVID-19, but what goes missing is that all the other variances, expenses, persistency, alterations, morbidity, they're actually positive. And I mean so a lot of the other positives are swamped by this negative view on COVID-19. But ex-COVID, the operational profit was very strong from embedded value perspective. Markets contributed about ZAR 1 per share to EV. First time I can remember a positive variance in a long time. And then the non-covered operations, I do have some slides later, they've gone from being a perennial drag on our EV growth to being very supportive. We mentioned this about 2, 3 years ago that we're beginning close to a point where our decision to invest heavily in Non-Life insurance, to invest in India, they will eventually start paying off and we're starting to see some of that now. And then -- and a couple of the slides will surprise most people later on. Okay, dividend. We have a dividend policy of paying out about 1/3 to 1/2 of our earnings. This year, we paid out a bit more than that. It's important that we are not changing our dividend policy at all. So the dividend policy is a cover of 2x to 3x. However, before the third wave started really hitting our earnings, we had extracted about ZAR 1 billion of dividends out of Africa. So we took the view that the cash sitting at holdings less any investments we require to make to India and so on in the short term. We're sitting with a few hundred million of surplus cash. None of the business units paid a year-end -- well, the Momentum Life business didn't pay a dividend at year-end for example. So we decided the regulatory businesses need to retain the capital to strengthen their balance sheet. But the cash sitting at the center, we didn't really see it justifiable to hold on to it. If every business unit feels they're correctly capitalized, there was no point in holding a few hundred extra million at Holdings. We did say at the Investor Day that we're going to perceive any capital that comes to Holdings as been shareholder money rather than money we can spend on things. Okay. And then the last slide on just the results. I mentioned earlier in the shareholder segment we sort of have different types of investments. The first part is in the dark blue bar. That is the regulatory capital that we invest in money market investments, bonds, very secure, low-risk investments. And that's why it's quite stable year-to-year. In the light blue, those are really our alternative investments. There's about a -- well, the portfolio has actually grown. The portfolio has grown to about ZAR 1 billion that we have invested in fintechs. About 2/3 of that is overseas and about 1/3 is here in South Africa. And last year, we actually took some negative write-downs on those investments because of the market environment. Despite the pandemic, although I think it's because of the pandemic, the fintech market has been very active in the last year. It's actually quite interesting. A lot of the investments have at funding rounds at very good valuations. And as per usual our venture capital, we tend to look at the latest funding rounds as some sort of a market value. We do take a bit of a haircut. We have to sort of justify it as well why we take the haircut. But we have taken part of the increase through our earnings in the current year, and that explains probably, okay, there we've got ZAR 300 million of that swing. The other factor, which again maybe shows our normal prudence, is we do have a 30% call option in a -- let's call it a fintech business in the U.K. called Moneyhub. We've been valuing that at 0 over the last few years. And in the current year, they raised a lot of money at very high valuations from third parties, and we were basically challenged to put some valuation on that call option, and that's ZAR 170 million first-time recognition. Short version here is fintech remains extremely hot commodity. As much as we try to be conservative at these valuations, we have to pay some respect to the transactions that are taking place. Okay. I'm going to talk now about the 3 deep dive areas. I'll start with COVID-19. Okay. Now because we raised provisions and so on, sometimes you can sort of -- you lose the wood from the trees and whatever, but at its core, over the last year, what I can tell you with certainty is we paid ZAR 2.30 billion more in claims after reinsurance and tax than in a normal year. That's in our life risk products. So you could think of it that across Myriad, MetLife Funeral and corporate risk, on an average quarter, ZAR 500 million is paid out after tax and reinsurance more than usual. That's 2/3 of our profits, it's gone. We do get some relief from annuitants. Okay. So the payment stop when people die. That offset is quite small. And I think it just reflects in South Africa, annuity business is quite small because of low savings versus the risk book. So net protection annuities, negative mortality variance of ZAR 1,7 billion for the year. That's before any funny provisioning movements. That's just cash in and out. The line at the bottom shows what does it mean compared to a normal year? In Momentum Life, we paid 101% more claims than a normal year. So I need to put a plus there because quite often [indiscernible] expected. 101 is normally a bad year, 1% more than expected. This year it's 101% more than expected, okay? Metropolitan Life, 81% more than expected. Momentum Corporate, 84% more than expected. I mean these are not sort of our crazy numbers a few years ago. If you did a stress test or something nobody would have thought this is possible. Across the group, our death claims were 91% more than normal for the year. It's also a interesting number because what we can tell from the national statistics that the number of deaths is maybe 30% more than normal. It shows you the insured population has been really hard-hit. And we've seen this in some of the other people's numbers and the season numbers. And there's a lot of reasons, but I think the primary reason is that people with insurance tend to be slightly older than the average population. But it's -- yes, it will be unusual to see, particularly in the affluent space with all the clients, to have a mortality experience that's better than national experience during the pandemic. Beyond that, we also need to raise provisions. So we increased our provisions by about ZAR 1.1 billion during the year. So the actual IFRS impact, the earnings impact is the actual claims of ZAR 1,7 billion and ZAR 1,1 billion of additional provisions, at least the ZAR 2,8 billion earnings hit. We are starting next year with better provisions than last year. So last year, we started the year with about ZAR 1 billion. This year, we start with about ZAR 2 billion. Now our modeling is a bit fancier than that. It's by province and by product, but it effectively works out that our provisions are sufficient for a repeat of F '21 and F '22. And the way we model that is really very high claims in the runoff of the third wave. We have then modeled a more modest fourth wave, and we have modeled higher-than-normal claims in between. That's another thing people forget, the claims have never got to normal even between the waves. Okay. So our modeling has improved, and we now start the year with enough provisions for another F '21 to happen. Okay. And if we add back these claims to earnings, we get to ZAR 3,8 billion. Hillie mentioned ZAR 3,5 billion earlier. We need to acknowledge that the markets helped us. So in Hillie's ZAR 3,5 billion, we take off the ZAR 238 million benefit from rising markets. And that's how you get to the ZAR 3,5 billion like-for-like earnings. Okay. Now the next topic. These slides are typical group finance slides, as Jeanette will probably call them. Lots of numbers, not much context. I want to land 3 points in these next few slides is I want to explain why did the valuation of non-covered businesses increase by 40%. I want to say why I think it's still a modest valuation. And then lastly, I want to point out how the group has actually changed dramatically in the last few years. So just on the first point, the valuation increased by 43%, but you must remember that last year's valuations were very low because of this June 2020. So we bought Alexander Forbes last year, which contributed ZAR 2 billion. If it wasn't for Forbes, there would have been about a 30% drop year-to-year last year. So some of this year's improvement is really the recovery of markets and to some degree, earnings, particularly investments. Investments valuation is more than 50% up. A lot of that is market returns. The other point is that we have continued to invest a bit of money. So we have invested another ZAR 400 million, ZAR 500 million in India. And we also acquired an asset manager in the U.K. during the year. So some of the increase is also additional capital invested. The pure growth is about 20% of the 40%, okay. So that gives you some idea of why it jumped so much. You would also see here a lot of the increase is established businesses. So there's detail in your booklet, but I want to highlight that Guardrisk had an excellent year. I would also say health had a good year in terms of valuation gains. So a lot of our more mature businesses, this is not deep J-curve things we're valuing, these are actual businesses where cash profits are improving. And the second point of why I think the valuations are still reasonable. In aggregate, our non-covered businesses are valued at 15x earnings. However, if you look at the established businesses, there's only one business that is valued at more than 11x PE, and that is Momentum Insure. We bought the Forbes business on a 20 PE. That business has done very well. That PE is already [indiscernible] to a 16. So the point is that we're modeling -- we're valuing the Forbes business -- okay, let's change the term. We're valuing the Momentum Insure business according to the business case we had when we acquired the business, and they're meeting the business case. So even though the 16 sounds high, it reflects what we want to do with the business. And there's a lot of synergies to come in the next few years. So that 16 is going to unwind to a 10 or 11 pretty soon. So I'm comfortable with that one sort of outlier in terms of a high valuation. Guardrisk is valued at 11x, Health is valued at 6x. I think all the other mature businesses are at very defendable valuations. The other thing you'll notice in head office we're putting a big negative valuation. So when you look at the detail, because of the rising valuations, we took the opportunity anywhere where there's any area to be more conservative we have such as head office costs. So I actually think that the valuation approach is as conservative or more conservative than a year ago, even though it's up 40%. And this is maybe the most interesting slide in this section. 3 years ago, at our Reset and Grow strategy there, we made quite a key point that we want to grow in other lines of insurance. We were very much a life insurance business. And at the time we say that because of our strong balance sheet, our appetite for taking on underwriting risk, the fact that we have excellent relationships and distribution in all channels, we believe that we're well-positioned to start doing more on the Non-Life insurance side, be it health or be it property or be it motor vehicles. And we've actually done it a lot more than I think anybody expected even a few years ago. So in our group, 3 years ago, 15% of our EV was outside of life insurance. It is now nearly 30%. So we actually made quite a fast transition to be an insurance company rather than a life insurance company. And the 2 real growth areas has been South African Non-Life through Guardrisk and Momentum Insure and India health insurance through the India venture. Those are the 2 things driving that ratio. Okay. Now I get to my last section, which is also the technical session apparently. Again, using the politician's trick of 3 points. I think the things I want to land here is I want to explain why is our group SCR ratio lower always than the Momentum Life ratio. Second thing I want to land is why we're very comfortable that Guardrisk operates on 1.1. We think it's a good ratio for Guardrisk. And the last thing I want to point out is we don't think Guardrisk will move away from 1.1 anytime soon. So I think people need to understand Guardrisk well so they can understand fully what the economic balance sheet of our group is. I think going forward, I mean Guardrisk is now 1/3 of the size of Momentum Life in terms of capital, total capital. It will be 1/2 in 3 years. I mean I think in this group, you're going to have to understand Guardrisk going down the line. Okay. There's some new data here. Top right is the Momentum Metropolitan Life capital ratio. You've seen that for years now, and you're familiar with it. We didn't drop the range because the cover dropped. We dropped it because we told in May we want to start running the business a bit leaner on capital. So that's fine. On the top left is the group capital ratio of 1.5. So immediate thing that you notice is the group capital ratio is literally 15% lower than the life ratio. Why is that? It's because Guardrisk is built -- Guardrisk is basically built to have a ratio of 1.1, okay? And I'm going to explain in the next few slides why that is the case. Also note the stability in the Guardrisk ratio. It will not be very volatile either. It will be low, but it will be stable. Next slide just shows you we constructed going back what the ratios looks like with Guardrisk in an economic basis without a statutory basis. The gap is also very stable over time. It has grown a bit with Guardrisk growing over the last few years. Okay. Now the educational part. This is the Guardrisk capital position -- not capital position, available capital. Note that most of the money is client money. So that is the important thing about understanding about Guardrisk. It's a big business, but majority of its business is partnering anything from a small business to a massive corporate to do insurance. So out of the ZAR 11 billion of capital available in Guardrisk, ZAR 9,2 billion is client money and ZAR 1,8 billion is our own money, okay? Why do we have any of our own money in here? Okay. One thing is we do want to take some risk, and we're taking more risk. And secondly, sometimes we do help the clients out a bit, very rarely, but sometimes we help the clients out. Okay. Now what do the people need? So starting at the bottom, our life insurance clients, a lot of well-known names in there. They've got capital of ZAR 5,8 billion, they require ZAR 3,2 billion, very healthy. Short-term insurance, they've got ZAR 3,4 billion of money, they need ZAR 1,8 billion, very healthy. The cells are well-capitalized. There are some cells who are not so well-capitalized. But I can name them in 6, one hand and one finger where the clients are not in a positive position, okay? So the vast majority of our cell clients have good -- have lots of money in there. Our own capital ratio is about 2x. So our own risk taking requires ZAR 800 million of capital. If you look at this ratio, it's close to 2x, which looks normal. Now you might say, okay, why is it 1,1? It is because of the regulatory requirement that we ignore any excess funds of clients. So you can see on the life insurance side we basically assume that the clients have ZAR 3,2 billion of capital versus ZAR 3,2 billion required. What is called excess own funds of ZAR 2,6 billion is ignored. So there's ZAR 2,6 billion of capital that is sitting there that just disappears in the standard calculation. I understand the regulator's view. Regulator's view is this is client money, not your money. The clients could rock up and saying please give me my ZAR 2,6 billion. In reality, it doesn't quite happen like that. There's a very deep relationship between Guardrisk -- as an example, during the crisis, a lot of the clients agreed to suspend dividend payments. Lot of the clients said let's keep the money in the cell to make sure everything works out well. There are procedures through statutory actuaries and approvals take dividends out. I think the real economic position is somewhere between the regulatory position and what I showed earlier, the 2x. The 1.1 is basically the capital, assuming all the clients take all excess money out in one day, which is not going to happen, okay? It also means that a lot of the volatility in the client cells is absorbed in the gap between what we can show and what we can't show. That's why it's almost always 1 on the client side. So you can think of Guardrisk as consisting of client activity, which is big at 1x roughly. And then our own risk-taking at 2x, which is maybe 10% of the business and they get to the 1.1. I think me and Guardrisk guys are happy to talk to anybody. This business is very well-capitalized. The 1.1 ratio is a bit of a technicality that I think people need to understand. It actually shows you there, there's 2 lines close to each other. That's about ZAR 300 million. That's the extent of capital support to clients at the moment. And that number is quite normal. It will -- normally has been somewhere in that range. Okay. So that was the technical. It wasn't too bad. I could see -- I saw the Guardrisk guys nodding that like that. Yes. Okay. So in conclusion. This has been a incredibly demanding year. I said that last year, but I had no idea what I was in for. Okay. So this year has been hard. Now I work in finance, and it's all very serious people, but it has been tough. At the same time, I think we've done as well as we humanly can. And there's really 2 points here. One is operational delivery. That's almost reactive. We have to pay claims. We have to look after clients. We have to give service. So very quickly, we were able to migrate from office to work-from-home and deliver service and whatever. What I'm more proud about is the second point. During this very difficult environment, it would have been easy for us to say, let's focus on the short term, let's just survive. We spend lot of quality time in the last year to devise a new strategy over the next 3, 4 years. I think that's important is we didn't go into a cave and just worry about tomorrow. We have decent plans for the next 3 to 4 years, including and excluding COVID effects, and we will react to it. So we didn't give up on long-term thinking during the crisis. The third point is that the business is in better shape in almost every aspect -- actually in every aspect than it was a few years ago. One thing I would highlight here, in particular, I can't get the analysts out of me, so I often sit back and I think of what are we really good at? And what are we really just averaging? We're not bad at anything. Okay. The thing where we're really good at I think really is the way we deal with distribution. The quality of our broker consultants, the management of our agents, the partnering at Guardrisk and Corporate with large clients. Our real strength as a business is selling and distributing product, okay. That is -- remains very strong. Then also because of that strength, we are winning the relative game. I say that we believe -- the net told me, we certainly are, particularly in the affluent space, I think there's no doubt we're winning market share. In Metropolitan, I'm almost certain we're winning market share. Even in Corporate, like I said, I think we're doing well in a tough market. There is not a single area where I think we're losing market share. But this also means that once we come out of this environment, I think we're going to come out with returns on capital and earnings that are very different to what we went into the environment. It will eventually happen, and then we're going to do that ZAR 5 billion and 20% ROEs. Okay. And my absolute last point, and this is important, I mean, I don't know, we just can't thank the staff enough. I think everybody has gone outside of the norms of expectations to do what we have done. So the staff really deserves a massive thank you. And for the first time in a long time, I would also thank our business partners all the way from the small IFAs to the big corporates. Thank you for all your support. I mean the market share gains is not possible without that support. Okay. Thank you very much. I'll hand over to Dan.

Okay. Thank you. Yes, yes, yes. You can take this.

Thanks.

Thank you very much, Risto. Let's do give -- in this room that there's fewer people than usual, let's give Risto and Hillie another round of applause for a wonderful presentation of the results. Yes. Hillie and Jeanette, you've got the media waiting for you from 12:30, but we're still live on BDTV 412. And we've got a couple of questions that have come up via our webcasting platform. I'll just start with this one. I'm just choosing this one because I think it might be important and is short and sharp and you'll decide who's going to answer it. I think Hillie, you might be the one who needs to answer this one. Will staff be forced to vaccinate to regain entry into the offices? Come, Hillie.

And the staff member asked that then.

Yes. Yes, Hillie.

Well, I'll always say to our staff that's listening, what do you think? What's our style? Look, I think we won't make vaccination mandatory. And that is just I think the way we deal with these people issues in our business. We're fully supportive as a management team. We're fully supportive of vaccination. I mean, the stats are there, and the stats will become more compelling. So I appreciate that some people might have other views and so forth. But it's very difficult not to be supportive of vaccination. And it's something that we will support and drive for our employees, for our clients, for us as a country. I think it's the best weapon against the impact of COVID-19. But I'd much rather sit with every one over the anti-vaxxers in our business like on one-on-one and try to understand and convince and sit with you and agree to disagree, whatever. I will go out of our way to convince 100% of our staff to vaccinate. But I think it -- ultimately, it will be your choice. There will be consequences. I think if somebody doesn't want to vaccinate and that person is somebody that can work from home forever, maybe it's a IT person doing some -- and that person is happy not to come to the office and the colleagues say, listen, we never need you, that person doesn't have to be vaccinated. But sometimes, if one of our staff actually engages with clients, deal with clients, then I think we'll have to address that problem. That person would not be able to fulfill that function. We can look at alternatives or whatever. So point is there will be consequences. I think people that are not vaccinated will find it more difficult to then attend meetings physically. If that impacts the job, again, we'll have to deal with it. But we're not going to stand and make something like vaccination mandatory. At the micro level, in little teams, which is our style, we will actually deal with it, solve it. Small teams will sit down and work out what will work for them.

Okay.

I hope that answers the question.

Yes, don't go too far, Hillie. I don't know if the next one might be you or Risto. Now this is from Integral Asset Management, Keith McLachlan. If you exclude the impact of COVID, the group still would have missed the low end of its normalized headline earnings target. How confident are you that the group will still achieve these earnings goals? Risto?

Yes. Keith, thanks. So it is ZAR 3.5 billion versus ZAR 3.6 billion. So we didn't miss it by a mile. But I think areas where we did maybe get it slightly wrong, I -- when we did the forecasting 3 years ago, we assumed quite a modest economic backdrop, but I think it ended up being even worse, okay? So I think there's no doubt that environment even without COVID wasn't exactly 100% rosy. If I think of areas where we might have missed the target, I think on new initiatives, we thought it would narrow those losses more than we did. That's probably the biggest single item. That alone would explain that ZAR 100 million miss. India actually met plan. Some of the other ones, you remember we had the lending joint venture; 3 years ago, we thought we'll make money by now. It's been discontinued. So it's really the new initiatives line where a lot of the gap arose on a like-for-like basis.

Okay. Now once -- that if COVID persists, one would expect risk to be re-priced in the group's book. How large could this premium hike be? And what percentage cancellations, lapses, could this trigger?

Yes. It's a very relevant point. So different business units face different realities. So in the corporate market, for example, it's very common to re-price all the time. But then you need to play it in terms of what are the competitors doing. So I think in the group risk market, we have already re-priced. And we have re-priced to a level we think is bearable by the client in the competitive dynamic. On the retail side, we haven't re-priced yet. But you are right, if COVID persists longer or we change our views on long-term mortality rates, we will have to look at re-pricing on retail side as well. The current level of earnings is not meeting our cost of equity targets. In other words, it will be unfair to shareholders to continue with these rates unless we believe mortality is going to normalize down the line. So it's something that we talk about a lot in every business unit.

Okay. Another question. What can you do to stem client cash flows? Investment had a very good new business performance, but net client cash flows did not reflect it as outflows increased almost at the same pace.

Yes. Jeanette, do you want to answer that?

Yes. Yes, there's a mic there.

I think it's on.

Thank you, Risto. Well, thank you for giving me the opportunity to answer that one. Well, so in the investments business specifically, our net flows does reflect that. I mean all those details weren't here today. But last year, our net flows on our platform, for instance, was ZAR 2.2 billion, and that increased to just close to ZAR 13 billion this year. Now when you have a platform business, you -- there's a certain size of your assets that will leave you on an annual basis annuity payout, for instance and so forth. And 3 years ago, actually when I rejoined the business and restarted with our Reset and Grow strategy we looked quite closely at that point in time at whether what I would call we had an outflow problem or whether we had an inflow problem. And when we actually compared our book to that of our competitors, and this business, by the way, is 25 years old this year, so we actually have quite a large mature book in our investments business. We actually realized that our client persistency on -- or retention on our annuities as well as our platform book was actually slightly better than our competitors. Our issue was an inflow problem. And that is when we set ourselves a target to fix distribution, to fix service to make sure that we could actually turn the tide on the inflows on to our platform. So Dan, actually, thank you, great question. But our net flows do reflect that improvement now. Thank you.

Thank you very much, Jeanette. We've just got about 2 or so minutes left before we end this session. There are a couple of more questions. I'm just going to pick on 2 very quickly, and the others I'm sure will be addressed in your sessions one-on-one with analysts. Corporate has failed to achieve an economic return for many years now, and the product appears underpriced. Is consideration being made to exiting this business? If not, what are the plans to end a through the cycle ROE of 20%?

Yes. Okay. Yes. No, that's a tough question. The short answer is we're not considering exiting, let's say, corporate risk business at the moment. At the same time, it is a very tough market in that previously risk -- your mortality was profitable, but disability was loss-making. Now disability is profitable, but now mortality is loss-making. It is something -- it's a bit like a short-term corporate market. You have to be very disciplined there. So we fully acknowledge that the ROE for the last decade has been poor. At the same time, it doesn't mean that we're happy with the ROE. We're taking all the steps possible to make sure that pricing is correct going forward. And like I said, there's no talk at the moment of exiting that business. But if the industry continues to be illogical, maybe down the line it's something we have to think about, but that's the last step. I think for now we will just try to be disciplined in our own pricing and try and make decent returns.

Okay. Fine. There's a couple more questions. I'm sure they'll be addressed later on. On MetLife sales, what is the split between the sales between funeral products and life insurance products?

Yes. Okay. I would say funeral is probably 2/3 of the book. The remaining 1/3, a little bit is underwritten life and then it's savings. Normally, it's closer to 50-50. But this year, we actually had a lot more risk business, and that's why the margin is so good.

Okay. Thank you very much, Risto. Well, that's where we're going to have to end it for today. Thank you very much. There are a couple of more questions, but I'm sure several of them will be addressed in those one-on-one sessions with analysts. Thanks to Risto. Thanks, Hillie, and thanks to Jeanette as well. And of course, another member of the group executive was here, Herman Schoeman from Guardrisk. Thank you very much for being here today. This is where we end this broadcast live here on Business Day television and 412 -- the DSTV Channel 412. Thank you very much. That marks the end of the presentation of the year-end results of Momentum Metropolitan Holdings for the period ended 30 June. Please keep safe. And if you haven't done so yet, go and get the jab. I've done my 2 already. Thank you very much.