Momentum Group Limited (MTM) Earnings Call Transcript & Summary

Good morning. My name is Dan Moyane. A very warm welcome to you all to this presentation of the year-end results of the Momentum Group to 30th June of 2024. Now we are coming to you live from the offices of the Group CEO, Jeanette Marais in Centurion, Pretoria [ Tshwane ] which is a fitting stage for this set of strong results by the group as it begins to implement its new impact strategy. Now the group has just successfully completed its 3-year Reinvent and Grow Strategy. The Eagle has landed. Now despite a tough year with virtually zero growth for South Africa's economy, Momentum Group has managed to deliver a strong set of results as you will hear during this presentation this morning. Now this good operational performance sets the base for future growth at a time when South Africa seems to have turned the corner with a new found sense of cautious optimism and hope about better economic prospects post the establishment of the Government of National Unity in July this year. Both the business and investor confidence have improved a lot since July. And hopefully, this positive sentiment we are experiencing will gain more momentum. Our results presentation is being broadcast live on BD TV Channel 412, that's on DStv and it's also being live streamed on the company's internal employee Sharepoint platform. We also welcome our investor analysts who will have an opportunity, of course, to interact with us via the CabCAM webcast. They will have an opportunity at the end of this presentation to ask a few questions to which Jeanette and our Group Financial Director, Risto Ketola, will respond to. Now let me also take this opportunity as we begin the presentation to thank the Momentum Group's Investor Relations team and the Events team of the group marketing unit for their role in preparing today's presentation. Please help me put your hands together and warmly welcome our group CEO, Jeanette Marais, to kick off this presentation.

Good morning, everyone. Just one little correction. This is Risto's office. So a real warm welcome from my side as well. And I want to start with the group of people that's important to us. So welcome to our shareholders, our analysts, the media, our employees, our advisers and all our friends. I welcome you once again to our head office in Centurion Risto's office as I've just said, from where we are doing the broadcast of our annual results for the year ended June 2024. In my part of the presentation, I will firstly discuss some key takeouts from our annual results, and I will also highlight some of the performance of all of our business units. Then given that we have reached the end of our 3-year Reinvent and Grow strategy, I will share how we delivered against our strategic objectives. And then I will remind you what to look forward to for the next 3 years in our Impact strategy. And then in closing, I will just reflect a little bit on how the last year has been for us. So to start off, and maybe this is the most important of all the slides, we delivered normalized headline earnings of ZAR 4.4 billion for the financial year, up 27% on F 2023. I think note the annual progression of our earnings over the last 7 years. And you'll see that we managed to maintain the step change in earnings since F '22, well beyond the pre-COVID levels of earnings. Now on this slide, only F '23 have been restated for IFRS 17. So it means that the dip in F '23 was as a result of the restatement and not actual operational performance. I shared at half year results that we are concerned about the downward trend in our VNB. Now compared to last year, VNB margin declined by 2% to ZAR 589 million. This reduction applies to all business units except Momentum Investments. However, note that there is a substantial increase and improvement in our VNB in the second half of the financial year and that the previous year's VNB was not restated for IFRS 17 and of course, we know that IFRS 17 uses a slightly more conservative basis. Now even though the last 6 months have been starting to move in the right direction, our new business margin certainly are not where they should be. So going forward, we will continue to give significant attention to further increase our sales volumes, no pressure, improve our new business pricing and our sales mix and we will pay special attention to reduce our acquisition costs. We have a detailed VNB improvement plan per business unit that we will use to address this issue. Actually, I think today, this is my favorite slide. Our sales, as measured by the present value of new business premiums have increased by 19% to ZAR 82.1 billion. This is an all-time record for sales volumes for our group. And we're really happy with the positive progression of our sales numbers over the last 6 years, even despite COVID and as Dan has mentioned, very tough economic conditions. Now the businesses that contributed significantly to this increase in sales were Momentum Retail, up 11%; Momentum Investments, up 19% and Momentum Corporate that saw 47% growth. Well done, Dumo and your team. So I promise that I'll spend a minute or 2 on each one of our business units. But I do want to just start by saying that our well-diversified and balanced portfolio of businesses has again proven its value during our Reinvent and Grow strategy. And I want to give you an overview of the current state of each of these businesses. I will start with Momentum Investments. So Momentum Investments continued its strong sales particularly in the life annuity segment where they made a strong contribution to our VNB. Thank you, Ferdi and team. Our local and offshore wealth platforms have also continued its sales growth over the last 3 years. We have made significant investments in asset management to strengthen our capabilities through our acquisition of IMG and the launch of our new baby in the group Curate. These investments will also increase vertical integration, improve investment margins and provide new investment solutions to our distribution channels. In Momentum Retail, Momentum's life business product businesses have reestablished themselves as 2 market leaders. And a real highlight for all of us this year was the launch of LifeReturns showcasing our market-leading digital capabilities in the protection space. The specialization focus in MDS, our IFA distribution channel helped us to achieve an all-time high APE sales record growing 24% on the prior year. The completion of work on the Momentum Digital platform enabled our adviser and client engagement strategies. Now more work is required to improve our VNB, and we started to take the first step to fix MFP, our agency channel with the close of the franchise model. Momentum Corporate is focused on profitable growth and disciplined expense management, led them to achieve a real step change in earnings over the last 3 years. The net risk margin ended well above the 5% long-term target. And the omnichannel member engagement strategy, increased digital engagements from 187,000 in F '21 to 2.2 million in F '24, far surpassing the target of 250,000 digital engagements. Momentum Insure's turnaround is on track, brand this year and brand this mile. With this year's results showing a significant year-on-year improvement of more than ZAR 500 million in earnings. We improved the claims ratio from 80% at its height in the last 6 months of F '23 and to 63% in the last 6 months by taking some decisive corrective action. We adjusted our new business rates for personal and commercial products and we have a new policy renewal model to improve profitability. Now this achievement was despite persistent motor claims inflation and gross flooding and hail claims more than doubling compared to F 2023. And I think this highlights a significant improvement in the quality of the underlying portfolio. Now Guardrisk, while Guardrisk cemented its position as the leading cell captive and alternative risk transfer insurer in South Africa, they also successfully established the general insurance business focusing on specialist corporate and commercial insurance. Guardrisk increased its earnings from ZAR 377 million in F '21 to ZAR 653 million in F '24 increasing the director's valuation by ZAR 1.6 billion to now ZAR 5.7 billion. And just interesting to note that ZAR 1.6 billion was also Guardrisk purchase price back in 2014. And then please note, Guardrisk Life has not been sold to Capitec. Recent media reports caused quite a lot of confusion in the market. Guardrisk managed an insurance book for Capitec via its cell captive facility. And Capitec merely received permission from the Competition Commission to transfer this book back to its own license. So don't touch Guardrisk. We don't talk about this enough, but do you know that our health business now covers more than 22 million lives across South Africa, the rest of Africa and India. We are striving to deliver more health for more people for less and we have successfully partnered with labor unions to expand into the section of the population that is employed but uninsured. Success in this segment is really evidenced by strong growth of 16% to 156,000 members in Health4Me making it the largest and fastest-growing affordable health care insurance offering in South Africa. And the use of technology such as, Hello Doctor, which offers virtual consultations 24/7, 365. We were the first in South Africa to launch this type of solution and have seen a 43% increase in virtual consultations. On Metropolitan, I want to remind you that this remains a significant business for us as a group, contributing more than ZAR 600 million per annum to our earnings, and the earnings are also improving. The Metropolitan team has taken decisive action and have made good progress on the 5-year turnaround plan. Sorry, the 5-point turnaround plan. Sales, workforce management and turning their VNB around remains a challenge. But I really believe that we are taking the right steps and that we will have a very different story to tell about Metropolitan 6 months from now. In Africa, our normalized headline earnings improved mostly due to investment income, not so much operational performance. Namibia was the largest contributor to the Africa segment with positive growth in APE and improving their VNB. For this segment, VNB, sales volumes and sales mix remain challenging, and we are focusing on those. We also have work to do to simplify our operating model for Africa and extract more value from distribution. India. We are currently the fastest-growing stand-alone health insurance business in India with 12.5% market share. And we remain optimistic about the growth potential for us in the Indian market with our health and wellness business in India. Given the differentiated business model, strong market share growth and the strong partnership that we have with Aditya Birla. The claims ratio in the Indian health industry remains a concern and is receiving significant attention from us. Our venture capital investments are housed in the shareholder portfolio. The volatile nature of this asset class has been evident over the past few years and the highly attractive initial returns have pulled back recently. But the strategic and innovation learnings that we get from this VC investments of ours continue to benefit our existing businesses. I will now give you feedback on our progress against the objectives for Reinvent and Grow. This was our signature slide that you will now see for the last time. Risto will give you feedback on the financial targets of this strategy, and I will now take you through the market share progress and the rest of the strategic objectives. So if we start with market share. I am very proud to say that every single one of our business units increased their market share. Does that mean I stop? or it's back, fantastic. Let's -- so let's give you the highlights. Momentum Investments, local -- wealth, local and offshore platforms grew to 18% market share. Guaranteed life annuities maintained its largest market share in the IFA market, and it's now at 32%. Myriad increased from 8% to 11%, and we extended our dominant IFA market share across all of our momentum portfolio. In terms of digital, we are very happy with the progress we have made to accelerate the digital way of doing business. In health, we process more than 750,000 transactions per day, 96% of them without any human interaction or human intervention. In Myriad, of fast-track digital screening and underwriting process was the world's first. We process cases 100% digitally without the need for traditional underwriting all medical tests. Metropolitan, Digital Solutions reduced our walk-in clients by 40% and our contact center volumes by 20%. Insurer now makes use of a straight-through digital process in claims capturing and conclusion, removing any need for human intervention in this part of the claims process. Momentum Corporate now use digital for 80% of our 2-part claims, and I'm going to talk about that a little bit more later. And then, in general, their digital interactions, as I've mentioned, are up from 187,000 to 2.2 million interactions. Then in terms of distribution, to grow existing channels, now I've already said it. I think Risto might say it as well. By now, you know that we do really well with independent financial advice. We are the IFA market leader through MDS, our IFA distribution channel across most of the Momentum product range and product -- branded product offerings. Consult by Momentum, our group sponsored IFA network exceeded its footprint growth target. Momentum Corporate also delivered strong sales from its existing distribution channels. But Momentum's MFP agents and Metropolitan tied agents struggled and more work is required in both instances. And this is the reason why I can't rate ourselves fully green in the dot on the right. In terms of establishing new channels, I would plot them all green, except for one component in Metropolitan. We did well in Momentum Retail, with the Myriad Direct channel, with 28% of our new policies are now through the direct channel from less than 1% APE to more than 8% now. In Momentum Insure, our direct and digital sales increased from 25% to 35% in F '24. Metropolitan broker channel APE from 3% to 8% and telesales channel from 9% to 11% in '24. We made the decision to discontinue the digital direct get-up channel. And this was mostly due to poor persistency. So I would, therefore, rate Metropolitan Amber on this for making progress but not entirely reaching all of the targets that we've set for ourselves. You can see that we spend a lot of place on product and service leadership. And I'm proud of how our businesses achieved the product and leadership goal. In Momentum Retail, all Myriad new business is now on our new LifeReturns rewards program. Our digital fast-track underwriting process is a significant differentiator for us in the market. And Investo, Momentum Trust have made good progress in their digitalization journey. Momentum Insure expanded the safety client value proposition by adding multiple new benefits such as the accident alert that automatically detects if a client was in a vehicle accident. They also doubled their safety adoption rates since F '21. Momentum Corporate, we're very busy. They launched Momentum Grow, a fully digital product that provides access to risk and retirement benefits aimed at servicing the largely untapped SMME market in South Africa and has been very successful in attracting SMMEs across all industries and in all 9 provinces. And we aim to continue to lead this market segment, which shows much potential for us. Momentum Corporate also launched Dragonfly, a marketplace platform that combines traditional employee benefits with individual choice and voluntary products. This product shop available to all FundsAtWork members, office funeral, life and disability cover and has been well received since launch, resulting in a sevenfold increase in individual solutions uptake from F '22 when it was launched to F '24. In Momentum Investments, we have seen a 243% increase in hybrid annuity sales and we launched Curate, our new asset management capability. And investments are also now using machine learning in their investment decision-making processes. Metropolitan introduced flexibility in their benefit design as well as no penalties when premium payments are adjusted. And to drive product commerciality, we have reviewed our client benefits and negotiated market access fees, which lifted our business margin by 3% already. We have discontinued Momentum Money. I see this as a positive decision, delivering on our promise that we would take action when businesses continue not to achieve targets or its strategic objectives. We also received several client service awards that we're very proud of. The most recent example is Metropolitan claiming the top spot in the Ask Afrika Orange Index for long-term funeral insurance for the second year in a row. And just this week, Momentum received the highest reputational Net Sentiment rating in DataEQ's Insurance Sentiment Index. That's quite a mouthful. And then the last objective for Reinvent and Grow, transformation. We improved on all employment equity transformation measures, as you can see there. I'm especially proud of the 10% increase in the top management layer. We are making good progress. We maintained our B-BBEE Level 1 rating, which remains critical for us to do business and to close off our 3-year Reinvent and Grow strategy. Having achieved most of the strategic goals we had set for ourselves over the last 3 years, I really think that, that has set us up for future success. We are entering the next 3 years from a strong position and from a strong foundation made possible by our 2 previous strategies. This gives us confidence in our ability to deliver significant value to our clients and to our shareholders, which brings me to the next 3 years. Our Impact Strategy, no wait. As you know, we launched our Impact Strategy to the market at the end of July. And when we created it, we really took inspiration from who we authentically are and what we already do really well. So the Impact Strategy has 6 group level strategic objectives and 5 key enablers. These are interlinked and they work together as a cohesive integrated strategy where each of our strategic objectives has a positive influence on the next. And of course, all bound together by our new group purpose. We build and protect our clients' financial dreams. So in the spirit of aiming high and delivering high, we have set ourselves some ambitious targets for Impact. We will deliver 2027 by 2027. So 20% return on equity, 2% new business margin and ZAR 7 billion in earnings. And we believe that this is very ambitious but very possible. And we will achieve this through disciplined execution of our Impact strategy and we will deliver and track the objectives and key results per strategic objective in each of our business units. And of course, going forward, this is what we will report on when we see you at results time. Now in closing. The change to the 2-part retirement system does not fall in the strategic period that we are reporting back on. But I believe that it would leave a gap if I don't tell you how the last month has been for us. In our group, 5 of our business units had to deal with a 2-part retirement system change. And let me share a few points with you. The highlight for me was that we were ready to serve our clients from day one. In fact, Metropolitan was the first to make payments on the first day, business day of 2-part, with some of our competitors kicked -- who kicked the ball down the line to the end of the month. We received about 150,000 withdrawal requests worth around ZAR 2.5 billion by 25 September. So this is literally just 2 days ago with an average withdrawal amount of around ZAR 17,000. I really love to see how our digital innovation sparked Life. We knew there would be a huge demand and we knew that we needed to be prepared really well. Interactions have overwhelmingly been digital at more than 80% of 2-part interactions. Almost 80% of applicants are between 50 and 49 years old, and 16% of applicants are in the 50- to 59-year old age group. This is worry that individuals who are so close to retirement are withdrawing from the savings but as they might not have enough time to make up for the shortfall. We also get a glimpse of the desperate financial state that South Africans find themselves in, 98% of people asked to withdraw the maximum amount that they could get. And here for me is a punt for one of my favorite topics, financial advisers. Financial advisers again proved their value because our clients with advisers had far lower withdrawal rates. From the first day, our dedicated adviser teams and retirement benefit counselors, played an essential role actually personally offering support in our reception areas and helping clients navigate the options. As a result, some clients who initially wanted to make withdrawals decided not to after they received this advice. And more than 2,000 clients canceled their claims after they learned about the tax implications and the impact on their retirement. In fact, some of our clients even took steps to reactivate dormant policies, and some even invested in new retirement annuities. So to close my section of the presentation, I would like to reflect on my first year as group CEO. It's been a busy year. We have a new group purpose. We have a new strategy, and we have a group brand that unites us all as a company. And in spite of the tough economy, our results and earnings are strong. And there is a great focus and a remarkable energy amongst employees. Like Johann le Roux would always say, the competitive spirit is back in this place. We truly are excited about the impact that we promised to make. We have placed a strong focus on disciplined capital management and investment in great businesses that outperform ROE targets while fixing underperforming businesses and that remains my and my team's promise to you. So from me to our board, my executive team and every single one of our employees, thank you for your support over the last year and to our financial advisers and clients. Thank you for trusting us with your financial dreams. I now hand over to Risto to take us through the financials. Thank you.

Thank you, Jeanette. Always a pleasure to talk about our performance, one of the favorable parts of the job actually. So good to be here. Okay. I'll start with a slide that normally don't cover, but it is end of Reinvent and Grow. So it's fair that we sort of have closed off on the financial metrics within that 3-year strategy. In 2021, we announced that we're going to target earnings of ZAR 4.6 billion to ZAR 5 billion and an ROE of 18% to 20%. At the time, we didn't actually have that much clarity on IFRS 17 transition, which made it a bit tricky. And about 18 months ago, we had a better view on IFRS 17, and we informed the market that those targets have been restated to ZAR 4.4 billion to ZAR 4.8 billion and an ROE of 14% to 16%. You might notice the impact on ROE is bigger than on earnings, and it's because there was a substantial release of equity. Our shareholders' equity went above ZAR 3 billion up on transition. Quite pleased to see that we met both of those restated targets, so very green dots on there. Non-life Insurance, in 2021, we said that we would want to diversify our earnings sources to have 20% coming from non-life insurance. We got the 19%. So finance is pretty tough on ourselves. So it's orange, 19% is not 20%. We got close. Guardrisk actually met almost exactly the promises they made 3 years ago. Now Momentum Insure had a big recovery in the last year, but still came short on the 3-year expectations, anyway close but not quite there. Then cost efficiency is quite an important one. We had a couple of e-mails this morning from investors as well, asking about like expensive variances and things like that. So 3 years ago, we said we're going to try to grow expenses at group level at 1% or 2% below inflation every year. And that will then over a 3-year period, we have a big cost base. It will result in costs in 2024 being ZAR 500 million lower than inflation. The reality is that probably by middle of the second year of the strategy, we realized the amount of investment required in terms of modernization, new technology, distribution channels made a quite a tough target. So we did end up growing expenses at more than inflation over the 3-year period. So we missed this mark by a fair amount. So it's clearly a red. Also, investors would have noted that expense variances were quite negative this year. So this year, we had expenses sort of above budgeted levels. I'll talk about some of the reasons later. For example, the closure of the franchise channel, which we believe is the right thing in terms of new business margins going forward. That was quite a substantial increase. And then also with the recovery in our share price and performance, things like IFRS 2 charges were higher than originally expected. So I'm not talking about it much today, but at the Investor Day, we said we're going to target about ZAR 1 billion cost savings over the next 3 years. I wouldn't read too much from this into that project. That project is managed quite differently, and it's a lot more granular in terms of areas of potential savings. . Okay. Another slide, I will never talk about again. So this is an impact of transitioning from IFRS 4 to IFRS 17. So last year, this time, I was here talking about earnings of ZAR 5.1 billion, a very good result, which had a couple of windfalls in it. On a restated basis, under IFRS 17, the number is ZAR 3.5 billion. Now just in the previous slide, I mentioned that we told investors earnings will only drop by ZAR 200 million under IFRS 17. So what happened here? It's quite important to note that normal impact of ZAR 200 million is really those first 3 bars. They're the ones will always be, the way we recognize profit on new business, the way we release deferred revenues, the impact on the equity and investment income. So those first 3 bars is about ZAR 100 million change, which is the ZAR 100 million to ZAR 200 million we referred to. The second 2 bars are unpredictable items. That just flow through the income statement quite differently under the 2 accounting principles or standards. So firstly, expense variances last year were quite favorable. Under IFRS 17, there's an important concept where variation gets absorbed into the contractual service margin, okay? So rather than recognizing all the profits and losses on day 1, you spread it over the remaining period of the portfolio. So in simple terms, the level of positive variation on IFRS 17 last year was not as high as it was on IFRS 4. Nice little takeaway from that is we do expect earnings to be less volatile under IFRS 17 and IFRS 4, which I'm sure investors in insurance companies will not complain about. Then market impacts is the biggest one here. Under IFRS 4, we never really hedged our liabilities perfectly in terms of asset liability management. The reason was that we didn't believe that the IFRS liabilities reflected the economic liability profile of the group. So we were hedging economic liabilities, not accounting liabilities. As we move to IFRS 17, we are now happy to hedge IFRS 17 liabilities closely because we think they're closer to the real economic risk we're facing. So during last year, we removed the remaining IFRS 4 hedges and moved into IFRS 17 hedging positions. And yes, I suppose sometimes you get lucky, good guys get lucky sometimes. But the substantial increase in yields last year resulted in a substantial hundreds of millions of ALM profits which led to that almost a windfall type of result last year. Going forward, just based on the last year, it's very clear that there is still some yield curve volatility. But it's probably measured in hundreds of millions rather than like under IFRS 4, it would be ZAR 700 million 1 year, ZAR 500 million next year. So yes, I mean, unfortunately, life insurance, there will always be some volatility, but it will be a lot lower than in the past. So that's how we got to the ZAR 3.5 billion. From there, we have grown earnings to ZAR 4.4 billion. I will not refer to the IFRS 4 number again. Obviously, we have one-on-one meetings, more than happy to talk about more technical accounting matters behind that. Okay. The earnings growth of 27% that becomes 32% on a per share basis. We have been consistently buying back shares for about 2 years now. So obviously, the shares in issue is declining. One metric you like seeing decline is shares in issue. Dividend per share, this one, we also got a few questions on this morning, up 4% year-on-year versus earnings growth of 32% per share. Recall last year, when we declared the dividend, we had earnings number of ZAR 5 billion we were looking at. We already then knew that earnings will be restated lower under IFRS 17 because of the nature of the volatile items in those results. So last year, we declared the minimum dividend possible under our dividend policy, which worked out to ZAR 1.20, okay? So we had a bit of foresight in that. This year, we have declared a dividend in the middle of our payout policy. So we normally pay out between 33% and 50% of earnings. We paid out 40%, which is ZAR 1.25. Going forward, you would expect earnings and dividend to track it other a lot more closely. So this sort of a disconnect is really to do with the IFRS 4 to IFRS 17 transition. We already mentioned this at the interims. At this stage, we do not see a reason to change our dividend policy. So we will continue to target a payout ratio of 33% to 50%. That said, Again, we ended up the year sitting on quite a bit of surplus capital. So when we do review the dividend policy, it is likely that we will revert towards a higher payout ratio rather than a lower payout ratio. Okay. ROE, 15.5% towards the upper end of expectations under IFRS 17. At the recent Investor Day, we also mentioned that now we've been doing this for a year, we have a bit of a better idea of what's possible in terms of balance sheet management and earnings. We are targeting that ROE to get back to the 18% to 20% range, okay, which I think is a substantially better outlook than a year ago when we thought it would be quite tough to get even back to the 16%. . This one, I didn't have lipstick, so, and it wasn't done yet. Okay. Embedded value in June, ZAR 36.94, 10% growth year-on-year, adding dividends, you get to like a 13.5% ROEV. Quite importantly, since 30th of June, yields have come down a lot. Long-bond yields are down another percent or so. Equity markets have done well and also you get unwind of the normal ROEV. So EV is probably closer to ZAR 38.50, ZAR 39 now. That's quite important for context of the buyback, I'll talk about a little bit later. We think the discount to EV remains quite substantial despite the recent share price recovery or rally. Sales volumes, up 19%. Jeanette mentioned very pleasing. Value of new business down 2%. Now Jeanette already mentioned the fact that we did not restate last year's VNB for a market consistent methodology. So in IFRS 17, we use market consistent principles for valuing liabilities and assets. To avoid duplication of work and having 2 or 3 versions of the truth, we have decided to calculate our embedded value disclosure on the same market consistent principles. Now I only have 24 minutes left. So I'm not going to get into the details of market consistency, except to say that it has resulted in a somewhat lower value of new business. So the ZAR 600 million to ZAR 589 million is not fully comparable. We did a back of the matchbox calculation, and we estimate VNB last year would have been about ZAR 520 million on the same principles. So showing that there is progress on VNB and when we talk about the new business CSM later, when we talk about accounting results, that improvement will also be visible. It does not change the fact that maybe the red bar of 0.7% will be 0.8% or 0.9% if we restated the IFRS 4, either way, it's not good enough. It's almost like a bit like semantics. The margin needs to be 1.5% to 2%. Whether it's ZAR 60 million more or less, it doesn't -- it's still not up to par outcome. . We talk about pars a lot here, reflecting a lot of golfers. Okay. I will talk about -- a little bit about the earnings in each of these businesses. Momentum Retail usually the biggest contributor to earnings. Momentum Corporate has [ pepped them ] this year. So Dumo if you do it twice in a row, I'll move you to the left. I definitely need to move you 1 or 2 spots to the left. Now the other, I look at the graph, yes. Okay. Momentum Retail, flat result year-on-year. Behind that flat result, there's a lot of moving parts. So firstly, Myriad, which is our affluent market risk product range. That accounts for about 75% of earnings in Momentum Retail. That product line was actually up about ZAR 100 million. So we had a good 12 months on Myriad. That was offset by lower results in our savings product range Investo and then also what we call Merge, our closed book. That's where we have things like Sage, Southern, all those things being managed. Those earnings were down. Also, that number includes about ZAR 100-odd million cost for closing of the franchise channel, which we believe is the right thing to do in terms of new business margins. So if you add just that project cost back, we would have had a positive earnings for the year. Then our Momentum Investments. Within the ZAR 533 million, there is a loss from Money, which has been discontinued subsequently. Ex-Money, that number is about ZAR 600 million. Now Money will have closing costs this year but by F '26, that number should go to zero and it will be about a 10% step change in the level of earnings for investments. Beyond Money, if you look at the ZAR 100 million improvement roughly. I'm not sure, rough. There's ZAR 70 million improvement in earnings, just over ZAR 100 million annuities. So annuities had another very strong year, both in terms of sales and profitability. The profitability of the annuities is largely a function of the book growing and the CSM on that book growing. So the last few years of strong growth is now converting to earnings releases coming through, and we expect it to continue. And even if the sales volumes drop off a little bit, I think the CSM will continue to grow well in the double digits, which will reflect then double-digit earnings growth in annuities. Mortality results were also quite favorable to line annuities. Beyond annuities, wealth platform profits were down a little bit as well asset management profits. Metropolitan earnings roughly doubled. We must sort of point out that last year was a very disappointing year for Metropolitan. So the ZAR 595 million is probably more of a normal result, whereas last year was an abnormality because of substantial persistency losses. It is pleasing to note that persistency results have improved dramatically is probably the right word in Metropolitan. We've gone from losses of like ZAR 400 million to maybe less than ZAR 100 million persistency loss. Still running a bit below expectations, maybe reflecting the tough economy and so on. But we do think the ZAR 595 million is a reasonable base to expect earnings growth from going forward. Also, when I talk about VNB later, Metropolitan has done a lot in 6 months. There's been significant urgency. And you see that in both the earnings and in VNB, that there's some real change coming through. The Momentum Corporate, last 5 years has been interesting for this business to say the least. Do you most looking at me here. 3 years ago, we were losing billions of rands during COVID. And subsequently, obviously, mortality experience has recovered. We're now at a point where we're making decent commercials on group risk. Our group risk accounts probably 2/3 to 70% of those profits. Both disability, which is a bit more stable and then life insurance, which is a bit more cyclical. Yes. So we do expect that we're at the sort of top end of the underwriting cycle may be at the moment on group risk products. But we do keep on asking the corporate business unit to keep in mind that in a cyclical business, you need to make sure that you make decent returns in the better times to subsidize or sort of prefund the tougher times. I'm talking about this a little bit more than usual. Just to note that, our expectation is the 1.2, it will probably decline into next year because the margins are at the high end of what is may be sustainable on the medium term. Beyond the risk, which is cyclical, there are some other quite stable sources of profit annuities again, savings, administration. I think those profits will do quite well going forward in terms of inflation plus. Okay. Moving off the Life operations, talking a bit about the Non-Life operation, I suppose. Starting with health, this business, the 4% growth is actually a very good outcome. If there's a business that is very linked to the real economy, it is this one. If you look at the large employers who have their own schemes, big pressure on employment numbers. And then if you look at the midsized employers that sit in our momentum scheme, also big pressure on head count numbers. So we're seeing the economy really have an impact on a number of fee paying members. We've been a bit sheltered by the fact that we do the GeM's contract, where the membership numbers have been more stable. We also have the fastest-growing low-income scheme, which I think Jeanette alluded to, half for me, which has continued to show good growth. I think 4% growth is a decent outcome in a very difficult environment. Then we got Guardrisk, ZAR 160 million growth, 33%. There's a lot of moving parts here again, but maybe the key story is that the underwriting results were exceptionally strong in Guardrisk. You'll recall that over the last 5 years, a big part of the strategic push in Guardrisk has been to grow their underwriting activities. The idea being that through the group's strong balance sheet and their knowledge of the partners, they partner with and their knowledge of underwriting. It's a good combination of surplus capital and knowledge to underwrite. There's been a concerted focus to increase that activity, and it has paid off handsomely in terms of earnings. Underwriting profits were up probably about ZAR 160 million pretax over the year. So most of that increase is actually underwriting activities. And it's already quite a diversified book. So obviously, [indiscernible] as well, you lose on one hand, you gain on the other hand, I think the reality is that so far, the underwriting activities that Guardrisk has expanded into seem to have been the right ones. You'll also see later the ROE of this business has improved over the years. That's another indication that the capital has been deployed in the right pockets of underwriting. And recently, they acquired another UMA, ex-UMA client. So let's hope the track record continues. Then Momentum Insure, ZAR 500 million swing in earnings, ZAR 200 million of that relates to a deferred tax asset and ZAR 300 million is what I would call the real underlying operating improvement, which is the loss ratio story that Jeanette already alluded to, so a significant improvement there. Later on, when I talk about cash flows to holdings. Insure probably could have paid a dividend this year. We decided maybe not to do so, but I think next year will be a nice year to illustrate to people that the significant capital injected during the tougher times is actually repaid quite quickly over the next few years. . Then on Africa, quite decent growth. When I talk about the ROE later, I'll put Africa results in a slightly different frame, but good improvement year-on-year of that ZAR 376 million majority is still Namibia. So Namibia is over ZAR 300 million, pretty flat year-on-year. Lesotho and Botswana in very round numbers, about ZAR 100 million each. And then the backwards number is really the central cost to support the Africa activities. The swing year-on-year -- I'm getting old. So those numbers are getting a bit small, but it's about ZAR 120 million. Of that Botswana, would have accounted for maybe 1/3. Another big one is Ghana. We don't talk about Ghana much because the earnings contribution is normally quite small. But last year, you might recall, the government of Ghana had a debt restructuring program. So we took substantial losses on our government bond holdings in Ghana. And this year was a bit of a normal small positive result in Ghana. There was a ZAR 90 million swing coming out of Ghana basically. So Ghana, Botswana are the main drivers of that year-on-year improvement. Then we have India. Top line growth in this business has always been good. I think India is one of those markets that is so huge that if you've got an attractive product, getting top line growth is -- is, I wouldn't say easy, but it's very doable. It's a matter of converting it into profitable growth that is maybe tougher at times. One thing to note here is that we present the India numbers under IFRS 17, which is different to the India govt numbers. So if you go to our partner's website, Aditya Birla Capital, which is also listed in India, their numbers are somewhat different, somewhat smaller losses. And I think IFRS 17 has a slightly more prudent revenue recognition policy. And IFRS 17 also requires us to identify potentially onerous books and surplus components. So at this stage, the IFRS 17 losses are a bit wider than India GAAP losses. That's not changed the fact that we expect the business to be breakeven in '26 on both IFRS 4 and IFRS 17 basis. . And then shareholders, the main change year-on-year is weaker returns on our direct private equity investments. We're talking about venture capital funds. Venture capital funds were negative this year, but not much more negative than last year. But we also have a few direct private equity investments. And on those, we had lower returns this year. Okay, sales. Jeanette already spoke about the strong sales numbers. You'll see Momentum Investments is more than half the group sales. Within that ZAR 50 billion of sales in Investments, ZAR 10 billion is annuities which grew by 40% year-on-year. For the last 2 years, we have said, we don't know how much longer this will run. I noted this morning, one of the analysts wrote -- I think this is a peak annuity cycle. July and August were good. So let's see, let's see how long it continues. But I think we used to sell about ZAR 2 billion of annuities per year, 5 years ago. So there's been like a fivefold increase in one of our stickiest and best-margin product. So that's been a very positive help in otherwise tough environment. If you go beyond that ZAR 10 billion of annuities, you have the traditional wealth platform, both local and offshore. Those grew by 15%. So annuities is getting all the limelight. But the traditional wealth platform is also doing very well in terms of flows. The other one noting here is Momentum Corporate. 47% growth. However, annuities was ZAR 200 million in the ZAR 15 billion, whereas last year, annuities were quite big. So when I talk about margin later, the reason why the growth in sales has not converted to a VNB improvement is because this year, corporate sales were largely low-margin savings contracts. Now that I look at Dumo, I remember, for example, you've got your largest ever single premium in FundsAtWork, but from a very big client on a very thin margin. Obviously, there, we're also backing on managing some of the assets internally and that value doesn't really get captured in the VNB view. And then maybe last thing on the sales front is Metropolitan down 4% year-on-year a lot of that is actual decision to focus on quality of sales. We have been careful with the sales force numbers. We have changed some of the premium rates to be higher. We have removed some of the benefits that were maybe overly attractive. We have stopped paying commissions in advance, except for the most experienced people. So there's been quite a big focus on quality, and it's had an impact on sales volumes, so they're flat year-on-year rather than growing. But when I show the VNB later, definite positive impact. Okay. I'll have to explain the positive impact because it's a year-on-year picture, but I'll do it again. So I'm on retail, there's margins. This is always -- when this is 1.5%, 2%, then I think there will be easy day. This is always the one slide that is difficult to talk through because there's no doubt that our margins are below what it should be. Let's just start on Momentum Retail, at 1% negative margin. Myriad products are profitable, not very profitable, but slightly profitable. I think we believe we can take those margins to 2%, 2.5%. So that will have quite a big impact on Momentum Retail. The savings products at the moment have a negative VNB margin. The market consistent methodology of valuing that has a bit of an impact. But even there, I think they've got to bring it close to a breakeven margin. I mean those 2 changes, Myriad up to 2%, Investo is close to zero, we're going to have margins at 1.5%, 1% which I think will then be a bit more palatable and comparable to peers. Momentum Investments, annuity margins are higher than 1.5%, quite substantially higher. What is not obvious, but I must make the point is -- the new business margin on both domestic and offshore list is positive. So there's sometimes a question of whether the list sales are just a loss leader. The reality, they're not -- they're not high margin, but they do wash their own face. . Then we got Metropolitan. So the year-on-year picture looks not very appetizing but remember the VNB was negative ZAR 80 million at half year. It's negative ZAR 40 million now. We had a positive VNB in the second half of the year. And it relates to all those actions I mentioned earlier, repricing, change of benefits, lower cost, by the way, they negotiated significantly lower distribution fees with a number of their partners. I'm fairly confident -- highly confident that VNB will be positive in Metropolitan in 2025. Then look at Momentum Corporate, as I sort of alluded to earlier, 1 or 2 big deals can swing this and this year, the big deals were in basically pure savings, pure administration type of contracts. And that dragged the margin quite low, still positive. And then we have Africa, I made a joke earlier, I don't know if it's safe to make -- I will make it -- Jeanette is looking at me. When I look at the Africa margin, it reminds me of that thing Churchill said about Russia. It's like a -- it's a 'riddle, wrapped in a mystery, inside an enigma. So yes, so if you look at the last 5 years, Namibia has been burning us. In Namibia, we had significant negative VNB but then that was offset by positive VNB in Lesotho and Botswana. So we were of that view that once we fixed Namibia, we fixed. Significant action in the last 2 years, Namibia VNB losses have more than halved. We made big progress on Namibia. Unfortunately, in the last year, the margins in Botswana and Lesotho have fallen quite a bit. Okay, so the gains on Namibia have been offset by weaker margins in those 2 smaller countries. So the overall VNB looks a bit worse year-on-year. Okay. Now time and probably interest of this audience precludes me from going into too much detail here. But during the Investor Day or after the Investor Day, we did get feedback that we did not give enough information on VNB. So this is a bit of a Oliver branch to give you additional VNB information, and we can discuss these in the one-on-ones. I think the key use for analysts here is able to do some sensitivities of how much of a VNB impact is from revenue growth versus cost versus distribution overheads versus confidence intervals for risk adjustment. So this gives you a lot of tools to work with, but maybe I'll just pick a few things out. So at first dark line there, present value of future cash flows. Those are projected cash flows going forward, both money coming in and money going out, and that is substantially profitable. So I think the one thing about life insurance is once you have it on the books, it's a very profitable operating margin activity beyond that phase. And that also explains why ROEs on traditional life companies seem to be quite high. I think closed book management can be quite attractive business, if you know what you're doing. . Offsetting against that ZAR 4.3 billion of future cash flows, we incur ZAR 3.2 billion of real cost today. That's cash leaving the group today in terms of distribution -- commissions mainly followed by channel expenses, management costs, things like that. The simple profit of ZAR 1 billion. That is the 50-50, the best estimate cash flows on new business sold, and it's profitable for all our business lines. The reason why VNB, and it's quite a big knock and it's negative in some areas, is under the market consistent principles, there's an argument that no willing buyer will buy the book from you at a 50-50 type of -- I want to lose money or win money. They want to be fairly confident that if they buy the book, they will make some money on it. We do that 85 percentile, so we basically recalculate the VNB to such a level where we think it will be that or better 85% at the time, okay? This is becoming a bit of actuarial lecture but if you look at the ZAR 589 million VNB, 85% of the time, we think it will be better than ZAR 589 million. So that's maybe an important thing to think about when you're valuing this company is the ZAR 589 million is not the best estimate. It's not 50-50. It's got quite a big allowance for potential risks. Okay. We'll take the rest of it offline. This section is called covered business analysis, but it could also be called IFRS 17 information. So IFRS 17 has given us a lot of new views on our business, and I'll share a few with you. The ones you like, please list now, we'll keep them. The ones you don't like, we'll take them up and find something else. So CSM, contractual service margin, it reflects the present value of future profits embedded in your insurance book. That's a bit of a simplification, but there's some product lines like group risk where we don't calculate CSM. Those profits are taken as they come. But on your longer contract boundary business, we started the year with ZAR 18 billion of future profits on the book. We closed the year at ZAR 19.4 million. 10% growth. What does it mean? We believe we grew the future outlook of our earnings by 10%, well above inflation. So that's quite a nice number, okay. . The second thing I note here is new business contributed ZAR 1.6 billion to future profits. VNB ZAR 600 million, so what's missing here, okay? So the first thing is VNB is after tax. So pretax VNB is maybe ZAR 800 million. but there's still ZAR 800 million gap. That is really onerous contracts, okay? So when our VNB is, let's say, ZAR 800 million pretax, it consists of ZAR 1.6 billion of very profitable business and ZAR 800 million of onerous business. That's quite an important thing to think about because if we can address onerous contracts with haste, we can see quite a big move quickly in both our VNB and our CSM growth. Now that's one of the new lenses that IFRS 17 has offered. It's made it very clear where we cross subsidizing across products. And it's raising a lot of the right questions of saying, the level of cross subsidy, the loss leaders, are they really worth it, okay? And it's this obvious. Okay. The expected growth is [ N1 ] in the discount rate. And then change in estimates, this is the end of the year, you need to revalue your cash flows to see are you still on track. We've been doing this for 2 years now, both years. We ended the year thinking, we actually have a better outlook than previously. So as the [ FDA ] again quite comforting to know that generally, we seem to be quite conservative in our projections of future cash flows. . This slide gives similar inflow, but I left it in because there's 2 additional points to make here. New business CSM up 34%. We did not restate the VNB because we didn't have to. And as any good central function, we manage cost well. Okay. But for IFRS 17, we had to obviously recalculate last year. We needed to have a comparative number. So we don't have a VNB, but we do have a new business CSM. And you can see it's up 34%, ZAR 400 million. So that's about ZAR 300 million after tax. At the same time, onerous contracts grew by about ZAR 100 million. So these IFRS 17 numbers support the view. I mentioned earlier, the back of Matchbox, we think there was about a 15%, 20% growth in VNB like-for-like. Okay. So just give me a little bit of audited proof that our VNB is in the right direction. And then the only other thing I wanted to mention on this graph is change in estimates. I mentioned earlier, this is positive this year, this was positive last year as well. You wouldn't want these to be massive positives every year because then you're sort of underselling your own business in terms of CSM. But from a finance perspective, you'll probably rather err on the side of prudence than not. Okay. The other lens we have from IFRS 17 is we can sort of split the CSM by business unit and product type. And if you look at that massive red block, the ZAR 8.5 billion, that is Myriad. Myriad accounts for 45% of our CSM. Simply said, over the next 5, 10 years, performance of Myriad will have quite a big impact on our financial results as a group, never mind life insurance. And it's a product that requires a lot of ongoing management. There's a lot of moving parts to manage it. So Johann's team will deliver that. So that's great. Then the second thing worth noting is if you add up the annuity blocks, 3.7, 1.8, 0.7 annuities make up maybe another 40% of our CSM, okay? So if you want to cut through all the noise Myriad and annuities will be the predominant drivers of our life insurance profits over the next number of years. So something that is not so obvious, but I'll talk about it quickly. If you look at traditional, 0.6 in non-retail and 0.1 in Met -- still 5 years ago, we spoke a lot about the fact that having all these closed books we acquired in the '80s and '90s and early 2000s, we spoke about the fact that's bringing a drag on our earnings growth. Those have actually become quite small. I didn't get the point now where the natural growth of Myriad annuities, everything else is much more important and bigger impact on our earnings than the runoff in the traditional book. Obviously, we will try and manage it as well as we can and extract as much money as we can. But I wouldn't say that Momentum is a low-growth business because of these books. I think that statement is quite inaccurate. . And then last IFRS 17 slide, is -- this is what we would call an analysis of surplus view of earnings. If you look at embedded value information, you'll be quite familiar with that. So new business costs you money to go on the books. In-force book gives you profits, some returns on your shareholder funds. The ZAR 3.7 billion is the earnings under IFRS 17 from life insurance for the year, up 13% for the year. The main reason I'm showing you this table is the next line, present value of future cash flows. If they were in our accountant say, the dream world of actuaries, and we could just calculate the best estimate profits today, no deferral. The number would be ZAR 5.2 billion. That's up 17% year-on-year. Of that ZAR 5.2 billion, ZAR 1.5 billion has been deferred for future recognition through the CSM and risk margin, risk adjustment mechanisms. We have tucked away 25% more future profit while growing economic profit by 17%. So the quality of earnings is quite good is that the 13% is net of building up quite strongly for future earnings. Okay. So these are some interesting lenses. I actually asked the group finance guys and they didn't seem to mind that we'll produce this table by business unit going forward. But it's quite a nice neat summary of earnings. Yes, I'm not sure if we'll ask this from Guardrisk Life. Okay, capital management, another important topic. We ended the year at 2.1x SCR, quite well above our internal targets and up year-on-year. To put into context, 1x SCR is at the 99.5 percentile which is sort of 2.6, 2.7 standard deviation. So 2.1x SCR is probably 6 standard deviations which is, I don't know, it requires a lot of imagination and effort to bankrupt this place. So from a risk perspective, I think the balance sheet is extremely strong. And jokes aside, beyond the ratio have been higher, the quality of the balance sheet is better. So things like intercompany loans, intangible assets, all those things, it's been cleaned up over the years. So the ratios are getting better and the nitty-gritty information behind the ratio is also getting better. Okay. So very happy with the solvency. Now some people won't say it's too much, maybe. So we have agreed to, subject to [ PA ] approval. We will start a ZAR 1 billion buyback program. We have been doing ZAR 500 million every 6 months. Because of the strong balance sheet and the strong cash position, we're now going to do ZAR 1 billion in the next 6 months. Come interims, obviously, we'll reassess. The share price has run hard in the last few months. This comes to EV is still 25%. We still think the buybacks are the right thing to do. Obviously, the share price keeps growing, hopefully, we might get to a stage where the discount is very narrow. And then we will have to think about special dividends. But the key point is we will not hold on to surplus capital for long periods of time. We will distribute them either as dividends or buybacks. We won't let it just sit idle. That's a price. Okay, so buyback is another ZAR 1 billion now. . Then ROEs. This picture can change quite a bit year-on-year. Momentum Corporate, I mentioned earlier, writing a high of underlying profitability. So ROE is very good at the moment. I think it will moderate, but it will remain well above 20%. Then you've got Mom Retail and Metropolitan. I mentioned earlier that sort of quite mature life books can be very high ROE business is a good example here, these 2 entities. Now that net profits have recovered to normal levels. So ROE is also quite high. Then you got Guardrisk, that number has been steadily increasing over the years supporting my view that the underwriting activities are adding shareholder value rather than detracting from it. Then Momentum Investments, somebody might think it's a annuities. It's not annuities, is actually very high return on equity. What is happening there is that money at the moment is sitting in there. So we've got a loss-making business. And then secondly, the platforms are profitable, but they don't print lots of money, but there's been a lot of investment in technology and things. So the ROE is also low on the wealth side at the moment. . But I think Momentum Investments, obviously, as FNZ is delivered and as money is addressed, that will jump up to similar levels to Guardrisk. Mom Insure has recovered, needs more recovery. Thank you, Brent. And then we've got Africa. Africa results are ZAR 400 million, which looks optically okay, but there's ZAR 4 billion of capital in Africa. We have taken ZAR 2 billion out in the last 2, 3 years. So there's no surplus capital in Africa. That capital reflects the regulatory capital required in every country we operate. The only way we can get this to an acceptable level is to actually grow operating profit substantially. At the moment, the ROE of this business is not that different to that ZAR 4 billion being invested in just the bond portfolio in the respective countries. We need operating profits to be substantially positive. And then shareholders, always a good visual of why you can't have billion sitting at the center, earning next to nothing. In fact, the earnings is less than the head office costs -- topic for another day. Okay. On my last slide, always been my favorite slide. It is getting -- I remember the first time we showed it 4, 5 years ago, it was like 6 lines, everything was perfect, like every year, things are get added. But this is really the cash coming in and out of holdings. We joke sometimes. It's me and Jeanette's bank account in a healthy one. So you'll see over the last 3 years, the large profitable business have paid ZAR 11.2 billion of dividends to the group, ZAR 3.5 billion in the last year. Note '23 was exceptional year. Remember the windfall type of profits in the Life business last year. Of that ZAR 11.2 billion, approximately ZAR 3 billion has been invested in internal operations. India has required capital, Momentum Insure required capital, Momentum Money, Africa has required some capital support. Net of the internal use of capital, ZAR 8.4 billion. That's about 65%, 70% of earnings for that time period. So that's maybe quite a good number to think about as a cash conversion for the group. 2/3 of earnings convert to cash. And true to our word, we either paid out in ordinary dividends or in approved buybacks. So over a 3-year period, we made ZAR 99 million increase in terms of holdco bank accounts. So I think we've been quite good to our word, if not excessively holding on the surplus. Okay. So that is the end of my financial presentation. Can we just conclude on a few more general points. So I believe these are a strong set of results. Especially the operating profit. So if you go through the details, you'll see operating profit grew probably at least 5% faster than headline earnings. And it's because some of the negatives in the results, the lower returns on enlisted equity, some of the yield curve impacts. Some of it falls outside of the operating nature of our business. VNB is the one thing that we can explain IFRS 17, IFRS 4 other way, it requires improvement, substantial improvement. Now -- it is now 27th of September, I think, somewhere -- it will be close, 3 months into our new strategy. So the Investor Day has long forgotten now. So we're already in the thick of things in terms of new strategies, so a lot of action being taken. Cash generation remains strong. And the second part of that sentence, I actually chose quite carefully. The balance sheet has never been healthier. But like I mentioned earlier, ratios are good, but beyond the ratios, a lot of little detail around the nature of assets we're holding -- another simple thing. Like we've been looking at reinsurance, I think we can use reinsurance to optimize our balance sheet a bit more. Now we are sitting on surplus. We're sitting on a strong ratio. So any gains we get from reinsurance will really become distributable capital for shareholders. So there's a few more levers on the capital management side, that we can pull. And then similar to Jeanette. I just want to finish off by congratulating our employees and saying thank you to all our clients, advisers, all other partners. Okay. I think I'll hand over back to Dan.

Thank you very much, Risto. Don't go too far. We've got some questions that you're going to have to be answering. Let's give both Jeanette and Risto again a round of applause. Thank you very much, for that, yes. With the time that we've got left, let's address some few questions, Risto. The first couple of ones I'm going to be sending your direction. This one is from Maria Stratton of ALG basically saying well done with an excellent set of IFRS 17 disclosures. She says she was very impressed to see the 10% growth in CSM. Can you please give more detail on the large 34% increase in new business CSM and how you achieved this and what the outlook is? Do you have a CSM growth target, Risto? Please come back. You can come back here -- that's okay.

Yes. Maria, the honest answer at the moment is we do not have a specific CSM new business target over the opening CSM. We're still looking at a more traditional VNB metric. It's something we can definitely think about. I think over time, we'll like to have one set of KPIs linked to audited numbers as much as possible. The very strong -- the ZAR 1.6 billion this year, I think the annuities are a big driver of that CSM. Also Myriad made a contribution. Yes, one thing is like group risk, for example, because it is a short contract boundary business, there's no CSM on that. So unfortunately, we lose CSM on some profitable business. which is maybe the reason for using VNB. But yes, Maria, we can talk about it on a one-on-one, but annuities will surprise you how much they make up of that.

There's one from Michael at UBS, Risto for you. What is the cause of the severe expense variance deterioration in the second half? And how confident are you that this has been adequately addressed through assumption changes.

Yes. So expenses jumped quite a bit in the second half, Project [ Tuco ] I mentioned, so that would have been there. We also had quite a heavy technology spending in 1 or 2 areas. So for example, in my sort of -- Ravi is not here, but the Chief Digital and Technology Officer's office. There was a bit of an increase in cost in the second half. And let's not underestimate the importance of the IFRS 2 costs. So -- at the interim stage, we still had less than 100% vesting probability of some of our incentives. Those ended up best thing. So we took quite a large catch-up in terms of our total remuneration expenses. Yes. So I was in order of magnitude, probably the biggest -- in fact, IFRS 2 would have been biggest, then followed by the franchise project and then digital being third.

I'm going to ask you the next one, Risto, I'm going to let you go. Okay. You deserve to sit down. Can you talk to the potential timing of your cost reduction strategy. Is it mostly back-end loaded in the financial year 2017 target?

Luckily not. So there are pockets. So for example, in health, in health, the savings are back-end loaded, which is really migration onto a single platform for health administration. And that is I mean, health is quite a bit contributor to the total savings. So health is back-end loaded. But on the life side, a lot of the savings actually in the first year or 2, particularly around items such as procurement and IT. So I think it's not unfair to think of ZAR 1 billion has been split quite evenly over the next 3 years, but it's definitely not like ZAR 100 million, ZAR 100 million, ZAR 800 million. It's going to be more evenly delivered.

Thank you very much Risto. I'm going to let you go. The next question is for a gentleman whose name has been mentioned there quite often, Brent Pretorius for Momentum Insure. Brent has a question from Michael Christelis of UBS. Can you confirm Brent if Momentum Insure made an underwriting profit for the year? What have expense ratios done?

Thanks Dan, Michael?

Yes, you can come, yes, no problem.

So thanks for the question, Michael. So from an underwriting point of view, we did not make profit. Our combined ratio was just above 100%, but about 9 percentage point improvement on the prior year. So we're encouraged by that. Expense ratios improved marginally. So just high 36% to low 36.2%, I think, was the number. So the next step in our turnaround and recovery plan is to get the combined ratio to below 100%. And we see that largely being driven by a further recovery in our claims ratio and we're encouraged by, again, what we are seeing recently. And then secondly, a small improvement in our expense ratio. Like Risto mentioned, the health business being a little bit back-end loaded in expense savings. So is our expense savings, a lot of digitalization work that needs to be done.

Okay. [ Brant ], another question for you before you sit down from Francois Du Toit of Anchor Stockbrokers. Why did the Momentum Insure premium growth slowed down in the second half from 9% in the first half to 4% in the second half of the year? And how much of the premium growth in F '24 came from inflation and how much from an increase in policy count.

Thanks, Dan, and thanks, Francois. Good question. So we took quite severe action to address underperforming portfolios in our business. So in the second half of the financial year, we saw the impact of some of those decisions. So we canceled one large portfolio of business, about 2,000 clients. We gave a significant increase, which led to significant lapses on another large brokers portfolio, which also happened in the second half and we had one of our large corporate brokers make a decision to rationalize its number of insurers and they decided to move a book away from us. So that negatively impacted the in-force book. Given the extent of new business, price adjustments that we had to take, there was also a negative impact on our new business. So the impact of that, I think, is seen in the slowdown in our gross written premiums. But we are confident that the quality of business that we now retain is materially better than the clients that we lose. And in the long run, we obviously see a recovery both in gross written premium volumes and in new business. The inflation part of it of our gross written premium growth. On renewal, we achieved about a 14% increase in premiums. So it's substantially above inflation.

Last question, also from Francois, it's for Dumo of Momentum Corporate, from -- Francois wants to know, Dumo please come up as well. Mortality variances were very strong in F '23 and in the first half of F '24, but reduced in the second half of 2024. Can you give a bit of color on the reduced variances? And what do you expect from group life mortality variances in financial year 2025?

Yes. Thanks, Francois. I think the downward pressure on mortality variance is something that we have been anticipating, especially given the downward pressure on premiums themselves. Actual claims experience in terms of number of claims has remained relatively stable and quite comparable to pre-COVID levels. I think what we have seen is that your average claim size has definitely been higher and then countered with a reduction in premiums. Hence, Risto's earlier point, just around the fact that we should expect a slight reduction in our risk profits going forward.

The last question for the session before we wrap up our presentation goes to Risto. It's from Roger. Risto, he wants to know about the negative VNB margin in many segments. It has been an ongoing problem. What has prevented a quick turnaround in this particular metric? Why does the group take on so much of onerous contracts of minus ZAR 800 million?

Yes. So Roger, obviously, the negative VNB is also net of a lot of overheads. So one thing prohibiting taking quicker action is always the concern that you might end up with more stranded costs than the VNB problem you solve. I would concur with you, though, that maybe that's an excuse rather than -- we need to really look at it carefully. There are some pockets where, particularly on the market-consistent principles, where you don't take massive credit for future market returns. There are some savings books where we think -- need to think hard. Are these really sustainable going forward? And then also, there are certain product lines, for example, investments where there's quite a conscious cross subsidy within a portfolio of products held by a single client. We need to think about those cross subsidies, whether they actually make commercial sense. The argument has been that what you lose on one product range, you make a lot more than that on the other products. But we really need to look at that carefully. Yes. But Roger, Metropolitan Life has been a big source of the onerous contracts. And I think you'll see a big delta there. So I'll be surprised if the onerous contract balance is anywhere near the current level in 18 months to 2 years from now.

Thank you very much. Risto, thank you to Dumo as well, and thank you to Brant for responding to those questions. Quite an interactive section. And thank you for the presentation, and thank you for having attended it. Yes. You know now -- the Eagle has landed. The future is going to be all about the Impact as the new strategy is going to be unfolding into the future under the stewardship of the Group CEO, Jeanette Marais. They're going to be busy after this. They've got media to be talking to and they're also going to be interacting, as Risto alluded to earlier, offline with a number of investors where they are unpacking these numbers. Thank you for watching us. It has been a brilliant afternoon and a strong set of results, congratulations to everybody involved. Thank you.