Momentum Group Limited (MTM) Earnings Call Transcript & Summary

When you say good morning, you get a response. I mean you say good morning, then the silence, you worry what is going on. Very, very warm welcome to this presentation of the interim financial results of Momentum Group for the period ended 31st December 2024. My name is Dan Moyane. Jeanette, I promised myself when I stand here today, I won't make the same mistake. I've met twice in the past when I presented the results. I know exactly which office I'm standing. I'm standing in Risto's office. So if I make a reference to that, I said to myself, don't make the same mistake today. Okay. We are, of course, live to you from the company's offices in Centurion in Svane. And welcome to everybody who's joining us today, the analysts, the investors, shareholders, journalists and employees, of course, most importantly of the company who can watch us and follow us right now live. We are live on BDTV, channel 412, that's on DSTV if you prefer to watch that and you've got access to the platform or you can follow the results and the presentation live on webcast via copcam.com, and then it's simply mg cpcam.com/mg and it's today's date, that's the 20th, which is 20, the month '03 and the year 2025, simply 2003-2025. Now the full results are also made available as usual on the group's website, which, of course, you know if you can just find us there, the Momentum Group's website. And by the way, we should thank all the Momentum Group Investor Relations team and the group marketing teams for all the work they've done in preparation for today. It's looking lovely, and we're all set to go, especially because by all accounts, it's an excellent set of results that we are indeed very proud of. So I'm going to hand over without much ado to Jeanette, that's the Group CEO, Jeanette Marais, will be followed by the Group Finance Director, Risto Ketola, to take us through the highlights. Good morning, Jeanette. Over to you.

Thank you. Good morning, everyone, and a real warm welcome to the announcement of our interim financial results for the 2025 financial year. If you'll indulge me, I'd like to say a very special welcome to my mom and dad, who's also watching for the first time today on business day TV. I didn't plan Ts, but I used to TS, I'm sure that's okay. So today, they can see what they spend all that education money on. So mom and dad, you're very welcome. And now for the joyful stuff. It really is a good day for the Momentum Group today with what we could call -- we were looking for words, excellent, brilliant, fantastic, I'll stick to excellent set of results, which we delivered in spite of a tough operating environment. So I will start, like always, with some of the key takeouts from the interim results. And of course, the highlight for us, we delivered normalized headline earnings of ZAR 3.4 billion for the 6 months, which is up 44% on the previous year. It is the result this time around of every single business in our group doing really, really well. And that really doesn't happen often, but something that we're very proud of. I think maybe just 1 or 2 things that's interesting to note is that in the last 6 months, we delivered the same level of earnings that we delivered for the full 2023 financial year. And even if you adjust for the one-off items such as market variances, we still delivered earnings of ZAR 2.9 billion in the first half of F '25, which is a remarkable performance. Then we achieved solid VNB growth of 40% to ZAR 279 million. This was driven by strong VNB performance to Momentum Retail. Thank you, Johann, turning around from a loss in the previous period to a pleasing contribution of ZAR 50 million this year. Metropolitan's VNB also improved notably, although it's still negative, Peter, still some way to go for you. And then Momentum Investments decreased their contribution slightly, but this business still remains by far the biggest contributor to VNB in the group. And overall, the group's new business margin have now improved to 0.7%. Our new business sales remained flat at ZAR 38.9 billion, but the trend is a consistent upward trend in sales over time. And I think just also noteworthy that in the second half of F '24, it included some large deals in Momentum Corporate, which were not repeated this time around. We continue to create value for our shareholders. The graph on the left shows the steady pattern of -- upward pattern of our dividend payout with a strong boost, of course, generated by our performance in the last 6 months. And we're very happy to declare a dividend of ZAR 0.85 for the half year. Risto will unpack this in a bit more detail -- but in total, we've completed ZAR 3.2 billion in share buybacks since the first half of F '23. And we've also now announced a further ZAR 1 billion in share buyback, which was approved by our Board earlier this week. And that will, of course, commence immediately. Overall, the share buybacks have created approximately ZAR 2 billion in shareholder value. So in this section of my presentation, I always choose a few businesses to put some focus on. And I will start with Momentum Insure. I'm really happy to report that the turnaround of Momentum Insure is definitely on track. We've experienced the best 6 months period ever with earnings of ZAR 230 million and Insure contributed ZAR 315 million to our group's dividend. So Brian is here. Brent is smiling very, very widely. For Insure, our operating results are also very strong. The combined ratio improved by 16 percentage points from 106% to 90%, which is below our long-term target and at its lowest since F '21. Operating profit improved by more than ZAR 250 million, which is up 300% year-on-year. We believe that these results point to a sustainable improvement in the underlying quality of the book. We remain disciplined in our growth strategy. Insurance revenue growth was muted due to corrective underwriting and pricing actions in the last 2 years, which impacted lapse rates, but portfolio profitability improved as expected. New business grew by 20% year-on-year with a strong recovery in our direct business of 36% and a recovery of 29% in our tight agency. So really, these numbers look fantastic. Then also on the left, you can see our claims ratio. The corrective actions led to the lowest half year claims ratio since F '20 -- we also benefited from the lower-than-expected weather-related claims like the rest of the industry. However, we do know that industry-wide, there is an expectation of some volatility in the second half of the year. And even after adjusting for the benign weather, the half year and rolling 12-month claims ratio still remain within our 57% to 60% -- 62% target range, and it's closely aligned with our industry peers. This encouraging outcome highlights the significant progress that we've made in enhancing risk selection, pricing and underwriting capabilities. Lastly, I couldn't help but put this graph on. The graph on the right shows the pleasing upward trend in normalized headline earnings for this business. Momentum Insure is now a sustainable and a substantial contributor to earnings and to dividends for the group. We've also been providing feedback on Metropolitan's 5-point turnaround plan over the last 18 months. And again, I'm very happy to see that -- or to show you that there's a lot of green on this slide. So Peter, you and the team, well done. We improved product commerciality by implementing various initiatives that led to a lot better profitability across all of the products in Metropolitan. We've reduced our cost base by ZAR 40 million year-to-date, and there's a further ZAR 20 million in savings that we expect from switching off some of the legacy systems. Migration and automation efforts have also focused on revitalizing and modernizing our product administration systems on a new digital chassis. We improved business quality, particularly the lapsed experience on protection business due to writing much better quality new business. The only area that needs a little bit more attention and where we're kind of, I would say, halfway through the implementation of a very solid plan is our sales workforce management. So we're not entirely there yet, but we have prioritized distribution rationalization and optimization, and we have a solid plan, which is being implemented by Peter and the team at the moment. So I think given the good progress on the 5-point plan, Metropolitan can now increase its focus on the impact strategy objectives for F '27. And it's probably, hopefully, the last time that I will talk to you about Metropolitan's 5-point plan. Then Momentum Corporate. Momentum Corporate has again shown resilient and profitable organic growth across all of their core product lines with normalized headline earnings exceeding ZAR 850 million for the half year, which makes it our star performer. Looking at Momentum Corporate's underwriting margin delivery, margins remain strong, but market and pricing pressures have led to a slight decline compared to the first half of F '24. The performance from F '23 to the first half of F '25 has been above target and expectation, but we do believe this is not sustainable. Dumo keep on telling us to tell you it's not sustainable and then they outperform themselves. So I won't be, yes, commenting on that. Our focus remains on profitable growth and disciplined risk management position -- or our focus on profitable growth and disciplined risk management positions us well to achieve our target margin of between 5% to 7% net of tax over time. The turnaround in permanent health insurance has been sustained, reinforcing our confidence that we will achieve our target margin. And then lastly, volatility remains a reality, but our strategy ensures our resilience in this space. So good luck on that, Dumo and team. Sorry, Fundsatworks assets under management grew organically by 49% from ZAR 63 billion in F '21 to ZAR 94 billion in F '24, and that was coupled by excellent growth of 14% in the umbrella book active membership over the 3.5-year period. But I think given the stagnant economy, I am particularly pleased with the 14% growth in membership numbers for this business. Through disciplined execution, collaboration and a relentless focus on scale, we are strengthening our competitive position and unlocking new opportunities such as SME markets for fundsatwork. So again, some great progress there. Then Myriad's massive improvement in VNB deserves a mention. They improved their VNB from ZAR 4 million to ZAR 71 million. The new business margin of 3.6%. This is not a number that we've really shared with anyone before, compares very favorably to our peer group. And this was driven by improved profitability of new business, 9% higher sales volumes, channel optimization, expense savings and lower cost of capital. And one of the reasons why VNB has started to improve is because of the digital and technology innovation in Myriad, which brings down the cost of doing business. And I did think that I'd want to spend a minute or 2 on exactly the progress this business has made in the area of technology and digital over the last time because it's really a fantastic story. Johann called it the highlight of his career. So far, we are not done yet, Johann. Life Returns is our new leaner, more accurate digital risk selection mechanism post the transition from Momentum from Multiply Premier, which was our previous wellness approach. Now clients can get a free digital fitness and health check on their mobile phones and earn their discounts without having to go to buy Connect Assist or pharmacies. This is a world-class innovation, and it's still a world first as far as we can determine. It provides a better client engagement mechanism with immediate feedback and benefits -- it's giving more discounts for more clients for less effort. This enables us to proactively engage with clients who have undiagnosed blood pressure problems or ineffective treatments. It bodes well for the future of proactive health management to prevent or manage future claims. With the life returns, digital health and fitness screening, we are also transforming how traditional onboarding and underwriting is done. We are attracting healthier lives who want to be rewarded for their lifestyle, but without having to actively engage and compete on wellness platforms. Many of these clients also experience our digital Fast Track underwriting solution by which we issue cover without the need for traditional medical tests. This makes onboarding simpler, faster and cheaper for clients and advisers. And really for us, the result has been higher market share with advisers and better VNB as we've just seen, as these efficiencies and better risk selection is starting to pay off. Outside of traditional face-to-face intermediary sales, we have also been successful with growing sales using leads from momentum.cosa and other digital marketing initiatives. We have witnessed sales growth of approximately 30% over the reporting period. Sorry, I just thought I didn't change the slide. It now makes up about 25% of our new policy applications and 10% of our new business sales for Myriad. And then lastly, we have also implemented major technology upgrades in our adviser and client digital engagement platforms, which we call Advisor Connect. The Myriad team setting the example of how all our product businesses should integrate into our group-wide engagement digital platforms. We have successfully exited all the older quote systems and transition to a modern onboarding platform, which we've integrated into the bigger momentum digital ecosystem. This delivers a new combined platform for quotes, new business submission and alterations, which has shown high adoption by advisers that used to be a bit of a problem in the past. Another spin-off of this technology architecture is that Myriad business can now easily integrate into the external advice platforms of any of the networks in South Africa. So in a nutshell, if we look at market share, winning market share isn't a sprint, it's a marathon. We don't claim victory yet, but our digital strategy is moving us consistently forward and is setting us up for success, which really is great. Now I'm going to just give you some feedback on our impact strategy and how we're doing with that. So I think by now, the 6 strategic objectives of our impact strategy is quite well known to you. And over the next slides, I will give you an indication of the group-wide performance for each. I'm not going to go into the detail. We will keep that for our Investor Day or Investor Markets Day on the 3rd of June, where we will go through our impact strategy in quite a lot more detail. You will see that there's some color indicators on these slides, and that really just indicates our confidence in reaching our end target after 3 years. So it's early days, but we already have a feeling of how we will be able to deliver after 3 years. And you can see that, that would range from fully confident to reasonably confident where we know that it will already require some extra efforts from us. So to start, unlocking the full potential of our business units mean that we boost our successful businesses with more capital and we fix our underperforming businesses through turnaround strategies. And we are highly confident that we will reach the targets that we set for ourselves for F '27. Progress includes the strides we've made with our turnaround strategies for Momentum Insure and for Metropolitan that I've just shared with you. The Africa operating model is currently under review, and we'll share more information on this as we make progress. But I think on a positive note, deserving a quick mention, Momentum Health has shown good open market membership growth, and we know the medical schemes market is a very tough one at the moment. And Health for Me continued strong membership growth of 14% on the previous year. And just hot off the press, just last week, Momentum Medical Scheme was awarded the Medical Scheme of the Year by News24 that we're very proud of. Harnessing synergies of collaboration in our group refers in our words, to hunting together to seize opportunities and unlock new growth opportunities through vertical integration. We are highly confident that we will also reach our targets for this objective. In terms of collaboration, across our group, there's great collaboration between many different business units, which is starting to really show results. I'm not going to go into the detail of that. Our focus on vertical integration is also showing off or starting to pay off, not as much show off. The highlight for me that I have to mention is Momentum Wealth's net inflows, which more than doubled when compared to last year due to the vertical integration with MDS. They achieved net flows of ZAR 3.9 billion compared to only ZAR 1.3 billion last year. And last year, we thought ZAR 1.3 billion net flows was great value. In MFP, our agency force, we still have some work to do on vertical integration. But we've developed an integrated wealth solutions framework and to better drive vertical integration with Qurate and equilibrium. And this shows the strong partnership between Momentum Investments and MFP. The advisers in MFP also capture all Myriad new business themselves, showing the improved digital partnership that we have between Myriad and MFP. Optimizing our cost base is about getting leaner and operating more efficiently. And it is essential for sustainable growth and to improve our VNB. We are highly confident that we are making the progress needed to achieve our targets. Risto will actually give you quite a bit more detail on this. We've launched a group-wide performance optimization project, which identified optimization opportunities of around ZAR 1 billion. We are looking at duplication across the group, but also targeting key streams such as procurement, technology and business unit efficiencies that we can unlock. We've completed the diagnostic phase now, and we've started with implementation. We are actively tracking progress on this project across all of the identified pockets of savings to ensure that these are permanently removed from our cost base. You know by now that we believe that face-to-face advice is here to stay and that it offers great growth opportunities. We drive advice as a key differentiator for us as a group. For Momentum Retail, in the MFP space, our new executive team is in place, and we have changed our entire operating model to enable sales. So MFP is now really ready and set up for success. Momentum Investments successfully completed the acquisition of minority stakes in 2 international adviser and wealth management groups, one in South America and one in Ireland. And this really is to help with vertical integration into our investment products. These investments in PO networks are already paying off with good inflows into our portfolios and an increase in assets under management that is already well ahead of target. And then Momentum Health saw a pleasing 15% growth in Momentum Medical scheme sales from independent advisers through NDS. And I've already touched on Metropolitan. Selectively expanding our addressable market means that we will focus on 4 key areas of possible expansion, channel, segment, product and geography. We rate ourselves reasonably confident given that most of the current initiatives are quite exploratory and quite early-stage assessments, but there are some early wins, and we're aiming to move this indicator to green pretty soon. Momentum Investments hold a sizable lead in IFA guaranteed annuity market share at about 58% and has gained significant market share in the overall market to 22% in post-retirement products, which include living, hybrid and guaranteed annuities. And then Qurate, the newest baby in the group, has been generating significant buzz with the introduction of key local and global fund managers, and their fund performance has been remarkable, consistently placed in first and second quartile. Sorry, Guardrisk. Did I now talk about you, Lawrence? By participating in alternative distribution channels, Guardrisk expands into markets where up to recently only Metropolitan played. Guardrisk have also shown significant growth in their underwriting profits. Their gap cover business continues to grow and micro insurance is growing and gaining traction in the low-income market. In Momentum Retail, we concluded the Fin Global transaction, which extends our existing holistic financial planning suite to include financial immigration capabilities. This transaction is still waiting or subject to Competition Commission approval. Momentum Corporate Grow platform. I've spoken about that before, digitally enables advisers to sell and service benefits to SMEs. Sales for Momentum Grow are increasing steadily and are ahead of target. And the great news here is that all sales are with first-time employee benefit buyers, which really is opening up another new market for us. In this strategic objective, we focus on simplicity and client insights to enhance client experience and drive efficiency. We are highly confident that we will achieve our targets for this. As you know, I have a personal obsession with how we make our clients feel and being unreasonable about achieving excellent client experiences in line with our purpose. We initiated a group-wide process to assess and improve client experience across all of our businesses with some of the progress mentioned on this page. And then in closing, our purpose is to build and protect our clients' financial dreams. That's our why. Our what is our impact strategy, what we need to focus on to achieve our purpose and our how is our culture behaviors that enable us to live our purpose and deliver on our strategy. It is how we show up every day at work, doing what's right for our clients, really caring about how we make them feel and driving excellence in every single thing we do. This is what motivates us. It's what gets me out of bed in the morning, and it enables us to deliver on our financial goals and targets. We have made excellent progress in the first 6 months, and our impact strategy positions us well for the remainder of the year. We remain steadfast in improving our VNB and driving sales volume growth. Advice will be a key differentiator for us. It carves out a unique space in the market and provides great value to our clients. Our leading market share in the IFA segment positions us well to deliver value. By leveraging technology to enhance the client experience and empower our advisers, we will ensure that our solutions remain relevant, accessible and tailored to evolving client needs. We continue to focus on delivering on the impact strategy, and I still believe that the financial ambitions for F 2027 remain achievable. Personally, I'm grateful for the unbelievable energy amongst our employees, your drive, your tenacity and your passion for really making a positive impact on people's lives. So to every single employee, my executive team are all here today. Our Board, thank you very much for all your support, all your hard work and to our financial advisers and clients, thank you for trusting us with your financial dreams. I'll hand over to Risto to take us through the finances. Thank you.

Yes. Thanks, Jeanette. It is really a pleasure to present these results, 15th time, so not the first rodeo. But these are comfortably, I think, the best results in absolute terms and some of the underlying trends we've seen. So yes, I think the word we used initially was exceptional. They are good results. But even if you dig deep into them, I think you'll be pleased with some of the things you find. Okay. Let's talk about our key financial measures. Earnings up 44%, ZAR 3.4 billion. As Jeanette said earlier, if you remove the market variances, so that's like investment variances, yield curve changes, credit spread income above expectations, earnings are probably about ZAR 2.9 billion. But we mustn't forget that last year was also a favorable market. So the growth rate remains in the mid- to high 30s if you adjust both the years for the market variances. So that gives you an idea of the strong underlying operational performance coming through in all the operations. Earnings per share, ZAR 2.45, up 4% more, reflecting the reduction in shares in issue through the buyback program. Our shares in issue used to be nearly 15% higher a few years ago. So there's been quite a big impact on the per share metrics through the buyback program. Dividend up 42%, ZAR 0.85 per share. Our dividend policy is to pay out between 1/3 and half of our earnings, 33% to 50%. In this period, it's at 34% towards the lower end. But as Jeanette said, we are doing ZAR 1 billion buyback, which equates to ZAR 0.70 per share. So the total distribution to shareholders is ZAR 1.55, which is up quite nicely from the ZAR 0.95, including buybacks last period. So the actual capital distribution to shareholders is up approximately 60% year-on-year. So if anything, our cash generation to shareholders is increasing faster than the earnings, which always pleasing if you're a shareholder. Then return on equity, this number, we're very proud of, and I was pleased to see that some of the analyst comments this morning highlighted this 25%. It is the highest in the industry. We take quite -- we take a lot of pride in the fact that our return on capital is higher than the other insurers we know about, at least the life insurers. Now there's been a lot of questions asked why is our return on capital so high? And there's a number of dimensions here. And I would like to claim it's all because of good capital management. But I think it's also important to remember that we haven't done any major M&A in the last few years. So we're certainly sitting with a lot less goodwill and intangibles than some of our peers. The reality is if you're making big deals, you're going to get a return on investment of maybe 10%, if you're lucky in the early years. So lack of M&A has definitely helped our ROE. A little bit more structurally, it's also important to remember that we tend to be overweight in certain products like life annuities where ROEs are very good. I did some work 2 years ago looking at ROEs by product and annuities actually have the best payback period and the best ROE of our current product range. So we tend to be overweight annuities, affluent risk products, things with good ROEs and underweight some of the product ranges where the ROEs are lower. So I do think we can maintain market-leading ROEs for the time being. It might come back from 25% to 20%, but I think a 20% ROE will be a strong achievement from a mature life company. Embedded value per share, ZAR 39.29. Subsequently, it's probably closer to ZAR 40 as we speak. Share price is about ZAR 30. So we're trading at about a 25% discount to EV. That's narrowed a lot. It was at 50% 2 years ago, 18 months ago. So if you think of the strong share price performance over the last, let's say, 18 months, -- probably 25% comes from EV growth, another sort of 30%, 40% from just re-rating of our share to more reasonable levels, I would argue. The 12% EV growth, if you add in the dividends, it becomes a 16% return on embedded value. 16% is probably a bit higher again than I would think is sustainable through the cycle. But again, because of the improvement in VNB and the increased confidence in the sustainability of the variances and also growth in areas like [indiscernible], which have naturally quite good return on embedded value. My view of the sustainable ROEV has increased by 0.5%, 1% over the last year or 2. So I think the discount to EV narrowing is very justified. Sales volumes, Jeanette mentioned that they're flat year-on-year. I'll show you later that on retail side, they're actually up year-on-year. Corporate volumes are down from the prior period. We had very good 6 months in the prior -- prior first half. But on retail, we're up year-on-year. Value of new business, up 40% on flat sales. So it's obviously a margin expansion story here. Again, Jeanette sort of mentioned that the big drivers of the improved margin is Momentum Retail. The margins are now positive and expect to remain so forever. And then Metropolitan Life margins, they're still significantly lower than we would want them to be in the medium term, but they have improved a lot over the last 12 months. Okay. Just quickly running through the business units. You'll see in the light shades there, we have the market variances, and they are slightly higher this year in aggregate than last year. I'll just make some comments on the dark bars, which is operational performance underlying these businesses. I'll start with Momentum Retail, flat year-on-year. But I would say the ZAR 594 million is still a very strong result. Things like mortality variance are still positive, just not as positive as last year. Alterations experience, which I'll talk about later a bit more positive, but not as positive as last year. Our ALM results are reasonable. In fact, we're actually close to match now, so closer to a 0 result in ALM. Last year, they are big positives. So there's nothing that has like weakened in this business, but last year was actually quite an exceptional comparative. So we're very pleased with the ZAR 594. Momentum Investments, this is where the big annuity book sits, the retail annuity book. The sales volume growth has been -- well, volume growth until this year was extremely high. This year, it's a bit more level, but still high volumes in absolute terms. The annuity book keeps growing. And because of the growth in the book, the CSM keeps growing. I think the CSM has grown by like 30% again. And that CSM release, and I'm getting a bit technical here, but the release of the CSM is really what's driving the higher level of earnings in the annuity book. Things like credit variances, no defaults in this period again. So those are good. Mortality remains better than expected on the annuity book. But it's really the structural growth of the AUM, the book size of annuities that's driving that. Something we don't talk about as often as annuities is the wealth platforms. Those earnings are up significantly year-on-year as well. Our offshore platform has always been profitable and continues to be so. The local platform profitability improved quite a bit year-on-year. And many of you know, we're busy with a replatforming project in that business. The amount of expenses coming through the income statement in the current period is quite a bit lower than the prior period on that project. Moving on to Metropolitan. Now Metropolitan's earnings are quite sensitive to the level of onerous business. So last year, we spoke a lot about the fact that Metropolitan sells some profitable business, but there are big pockets of loss-making business sold. That has reduced now with all the actions taken. So the focus on premium rates, product benefits, product rules, when we pay commissions, when do we claw back commissions. All those things have had a positive impact on the profitability of new business, which reduces onerous contract, which comes through income statement immediately. So a big benefit in the metropolitan there. Also pleased to note that the persistency has improved materially year-on-year. It's been interesting looking at the results from the industry, there's been a bit mixed commentary on persistency. We can confirm that our actual collection experience is getting better in the entry-level market. So combining that with the more conservative actuarial assumptions, we've actually seen a material rebound in the -- what we call the persistency variance within the results. Then going into Momentum Corporate. As Jeanette said, now our biggest business, we probably need to change the order here, start with corporate next year. Mortality profits remain slightly above long-term norms. But at the same time, we don't think that they are out of line with the current and expected mortality experience. In other words, we don't plan to give back profitability on group risk. What is less spoken about recently is the biggest structural change in the last 8 years is the disability book. When I joined here 8 years ago, we were losing -- I don't want to say the exact number, but we were losing not amount of money every year. And now we're making steady profits there. It's literally a ZAR 400 million annualized swing from where we were to where we are today. So I think the mortality book -- sorry, the disability book is where you had a structural change in the level of profitability. and I don't see that going backwards anytime soon. Maybe the one -- or the primary reason why the operational profit is a bit higher this year is there was approximately ZAR 100 million release from the IBNR reserve. That stands for incurred but not reported reserves. So those are claims we expect to come through in January, February that went reported by 31 December. Those estimates are based a lot on the level of claims we see late in the year, November, December. And we actually saw claims reduced quite a bit in those 2 months. So we're expecting less latent claims to come through. So the reserve reduced by just over ZAR 100 million on that. Now this business is scheduled to be a unicorn in 2 years. So do you have ZAR 1.4 billion annualized now that I can just tick the box on the ZAR billion for 27, he's not nodding. He's acting like you didn't hear me. Okay. Just moving on to the other business units. So health earnings are basically flat year-on-year. Now 80% to 85% of the health revenue is admin fees. You can just imagine the current environment, economic environment, you're not going to get anything more than inflation on fees per member if that. At the same time, the total membership growth was quite muted. Jeanette mentioned that our open scheme is doing okay. Our public sector business is doing okay, but we're actually seeing a reduction in the membership in some of the corporate schemes. So our admin fee income overall was only up 4% year-on-year. Now some of the underwriting profits like on Health4Me and capitation contracts, they lift total revenues to 5%. But at the same time, it's also quite a people-heavy business. So your cost growth was approximately 6%. So that 1% growth is sort of roughly inflationary growth in both revenues and expenses for the period. Guardrisk, no longer surprising, but always good, 33% growth. It's worth noting that we spent a lot of time -- well, Jeanette spent a lot of time talking about the turnaround insurer. But as Guardrisk has become more active in underwriting activities, the same trends play out in Guardrisk. As an example, we actually do quite a bit of motor business in Guardrisk. We provide the cell captive insurance for some of the manufacturers if you buy the insurance. We have some DMAs that write motor business. I think we have some deals with like associations of motor dealers. So we have a reasonably sized motor book in Guardrisk, which obviously did a lot better like in Momentum Insure. We don't insure -- not many -- we don't insure many private homes in Guardrisk, but we insure corporate and commercial property. So the better weather also had a benefit on that. So a lot of the underwriting trends are similar in Guardrisk to Momentum Insure. And in that 33% growth in profits, underwriting profits were up 52% year-on-year in Guardrisk. Jeanette slide quickly mentioned gap color is a product line we're quite big in. So we own -- overall gap cover margins, I think, are pretty steady, but what's pleasing is the business we bought a year ago, Z Life. The profitability in the first year has been higher than we expected in the business case. So overall level of gap cover profitability is pleasing. And behind that 52% underwriting profit growth, the more traditional, let's call it, the admin fee business also grew in the mid-teens. So good growth in the core business and exceptional growth in the underwriting activities. Momentum Insure, we've spoken a lot about the improvement in the loss ratio, very pleasing result. Now I don't expect ZAR 350 million of dividends every 6 months, but we do expect ongoing dividends. I think the business is in very good shape now. Obviously, there's a market that can be cyclical. But from what we know today, we expect the profitability to remain decent here. Africa. I have a slide later that shows that Africa is actually the biggest user of capital in our group. There's about ZAR 4 billion of capital, predominantly in Namibia and lesser degree, Lesotho and Botswana. So just the ZAR 4 billion of capital generates almost ZAR 200 million of investment returns. It's mainly invested in local government bonds. So the operating profitability in Africa remains quite modest. I think the positive parts of the operating profitability in this period was the health businesses did quite well in Africa. And also Namibia had a reasonable operating profit in the Life business. We did see both Lesotho and Botswana Life operating profits go backwards, whereas in short-term insurance, it's quite small, but it was steady in Africa. India, we've seen a substantial reduction in losses in our India business. India, the growth story is always good. Growth is always astronomical when you compare it to South African experience. You add 100,000 clients' average month net clients. Okay. But obviously, the loss ratio, the claims ratio is a lot more hard to bed down. The improvement we've seen in our India results is a bit better than you'll see in the India accounts. So when Aditya Birla Capital reports, they report on the Indian accounting standards, whereas we report under IFRS 17. And because IFRS 17 is more forward-looking, some of the premium rate adjustments and things they have done actually come through better in our results. We still expect this business to be breakeven for the next financial year. Shareholders, there's quite a few moving parts here. But as I'll show you later, there's ZAR 7 billion of capital sitting in shareholders. So investment returns on that capital play a big role. Last year, we had quite large fair value losses on some of our venture capital, private equity property investments. This period, they were only a small negative. So the delta of ZAR 160 million is really a better fair value outcome on unlisted investments. Sales volumes, I'm not going to labor at this point, except if you look in the green, MOM retail up 4%, MOM Investment 6%, Met up 2. Those are all retail-focused businesses. Also in Africa, that 19% includes a retail and a corporate component. Our retail sales are up probably around 5% year-on-year across the group, whereas then corporate sales are down 26%. If we look at the movements in margins, and obviously, the VNB movements will just be a similar trend. Momentum Retail's margin improvement, is dramatic too strong a word maybe, but it is substantial. And a lot of that is driven by the Myriad product where I must say that Momentum Life, Momentum Retail team has been doing a lot of work for a number of years. Johann often refers to the fact that maybe I don't fully appreciate all the complexity of the spaghetti he's been dealing with to get the business into better shape going forward. It's nice to see it's all starting to come together now. So the results of this business is improving. And not only the results, I think the client experience, adviser experience, it's improving at the same time as the financials are. Then we have Metropolitan, a big recovery. We do think that in 4, 5 years, this margin should be 4%, 5%. So I think there's a lot more to go here. In fact, I was doing a little bit of analysis now for the Board meeting. I think in every other product area in South Africa, our margins are very comparable to our peers. It is really in the metropolitan space that we got a bit of a gap to what we would consider to be a competitive new business margin. Momentum Investments, margin came down a little bit because annuities fell a little bit year-on-year, whereas the platform sales, which I think the margin grew quite rapidly. So it's a mix effect. Momentum Corporate, the business we did get a lot of it was savings business, which were lower margins than annuities or risk. And in Africa, like always, there's a bit of movements here, but the disappointing for the period was Namibia, where new business profitability and margin went backwards. In simple terms, the sales expenses grew faster than sales. So I wouldn't quite say back to the drawing board, but obviously, it's getting a lot of focus in terms of sales remuneration in that country. Onerous contracts. This is basically the pretax loss we recognize upfront. So IFRS 17 has what I think is a good accounting rule that if you sell profitable business, you need to spread those profits over the contract term. If you sell loss-making business, you take the hit upfront. So when you sell loss-making business, it comes through income statement immediately. Our number of ZAR 488 million last year, you annualize nearly ZAR 1 billion, it's a big number. I do believe that we sell more onerous business proportionately than most of our peers. So it's been a big focus for us. We're already seeing good trends in most of these. So it's similar trends to the VNB actually, if you think of it, they're very interlinked because a big part of your VNB movement is getting rid of profitable business. So momentum retail has improved. Momentum investments a little bit, MetLife quite a bit. Africa, like I mentioned earlier, it was really an Namibia story that caused that going in the wrong direction. I'll show you a bit more on the next page in terms of why it's important. But I'm also quite pleased to say that just in the last few weeks, I've seen quite a few proposals around product pricing, product structure that I think we're going to shave off a lot of that ZAR 40 million in the next 12 months. So I'm quite confident this number will come down. Yes. So a common question we get from investors is you've got nice CSM growth, so CSM is now this future profit number. How come you adding a lot of new business to your CSM, but you're not much of a VNB? The answer is quite simple. I don't think we like the answer, but the simple answer is we sell a lot of very profitable business, and we sell a lot of loss-making business. So half the value created by the profitable business is eaten up by onerous contracts, which is, by definition, a loss-making business. I mean other big adjustment is obviously tax. One is the balance sheet number, one is the earnings number. But I quite like showing this picture as well is that -- we believe we can probably have that ZAR 430 million in a reasonable time frame. You have that and you grow the ZAR 764 million at, let's say, mid-teens, it's going to double your VNB, okay? So I think we've got 2 quite nice levers, keep growing the profitable business at a reasonable clip, market share gains and start eliminating some of the contracts that create the renewal losses upfront. Now that I start on CSM, let's stick to it. So that ZAR 20.2 billion, you can think of it as the present value of future profits we expect from our in-force book. So basically what we used to call the VIF in the embedded value world. It's grown by 4% in the last 6 months. I'm actually quite excited about 4%. Now if you annualize it, it's 8%, it's comfortably above inflation. Now remember, we are a mature large life business. If we can grow our core business as measured by CSM by 8%, we eliminate some onerous contracts, that's going to add 1% or 2 more%. We gained a little bit of market share, maybe 1%, 2%. We shave some of the renewal costs 1% or 2%. If we can grow CSM at 8%, we can grow life earnings at 10% to 12%. If we can grow life at 10% to 12%, contributions from Guardrisk, India and time, we can grow group earnings in mid-teens. And I mean this is -- I think this is a good enough outcome for the core business. What is also worth noting here is change in estimates. This is the impact of our CSM estimate because of what happened in the last 6 months. We continuously surprise ourselves on the upside, okay? So for the 5 times we've shown this, every time we move our CSM estimate upwards based on actual outcomes in the period. It reflects 2 things that are probably both equally important. The first one is actually more important is I think we manage our in-force book well actively. And then secondly, maybe on the finance side, we're a bit conservative in our assumptions. Okay. Then breaking the CSM into business units and products. I'm sure the analysts will love spending some time looking at the details here, but I'll just talk about 1 or 2 things. So the first thing that sticks out here is that big red bar in retail. That's Myriad. Myriad accounts for about 45% of all our future profits embedded in the CSM. Now obviously, there's sources of profit like group risk, guard risk that they are not included in the CSM measure. But I would say Myriad probably accounts for 20%, 25% of group profits on a sort of a medium-term view. Important block of business, very nice to see it growing at nearly 10%, okay? And I'll expand on a little bit later. I think the most -- not unique maybe, but a very important thing in Myriad that a lot of people don't know. The existing customers buy up benefits significantly, okay? So that might not come through as new business, but it comes through as very good premium income and CSM growth. And yes, I mean, the sort of 8% to 10% growth in Myriad CSM, I think, is sustainable. The second thing that is fairly obvious is the big growth in annuities over the last 12 months, you'll see momentum investments is approximately 25% growth. It will slow down a little bit, but I think this year, we'll still grow it at 15%. Next year, maybe another 12%. So even though sales are flattening, I think the CSM will keep growing in the annuities. A smaller number, but important is metropolitan, the red bar, that's funeral. It's grown by 20%, ZAR 1.1 billion to ZAR 1.3 billion. So a lot of these product actions taken to change benefits, change escalation patterns, increase premium rates and some things, eliminate some products, immediate beneficial thing here as well. It's the first time in a while, we've seen a funeral CSM grow quite nicely year-on-year. And then the last thing I'll mention for lack of time because I'm terribly over here is the dark blue bars, that is your traditional business, our closed business. So in total, it adds up to ZAR 0.6 billion. 3% of our CSM is legacy business. Now 15 years ago, a very common investment thesis on momentum was you got too much closed books, you bought Southern, you bought Sage, you bought this. I mean passage of time means that there's very little of our earnings coming from those closed books today. I don't think we have any more exposure to legacy than any other large insurer. So I think it's one important for investment thesis that it's not like we're somehow hamstrung by this legacy book. We're just glad it's there to cover some of the overhead still. Okay. Again, I'm not going to go into too much detail here. We can do so in the one-on-ones with analysts. If you look at total earnings on IFRS 17, 20% growth, that is the growth in your traditional life profits. What I wanted to show here is that present value of future cash flows, up 29%. That is the actuarial best estimate of future profits. Okay. Accounting rules say you have to defer some of it. So out of the ZAR 2.7 billion of future profit, we can only show ZAR 1.9 billion today, and the remainder gets deferred to be released over the contract term. The fact that the economic profit is growing faster than accounting profit to me is important because that will -- there will be a catch-up in later years, okay? So we're adding more into the CSM bucket to release through earnings in the future. So I'm glad be adding to it rather than drawing from that bucket. Okay. Capital management. This should be a very short and quick section. It's great. Okay. So solvency cover, 2.15 above our upper target of 2. That 0.15 excess, that's a couple of billion rand, it's ZAR 3 billion. So you could almost say surplus capital in the Life business is ZAR 3 billion. Jeanette mentioned the buyback. So we bought back ZAR 3.2 billion of shares. In the last 6 months, we actually did ZAR 934 million. We didn't do the full ZAR 1 billion. We have a structured buyback program where we limit activity based on market volumes in any given day. So we actually couldn't complete the ZAR 1 billion. We will try to do ZAR 1.066 billion in the next 6 months. So we will try to catch up. It is obviously dependent on the volumes traded in the market and also what is our appetite to make up the percentage of that market. But anyway, we will try to definitely catch up. Also interesting, if I add the ZAR billion we're going to do now, it's going to be ZAR 4.2 billion bought back. At the beginning of 2023 financial year, our market cap was about ZAR 20 billion. So we would have bought back about 20% of the company over the last 3 years. It's interesting thought. Okay. This is a slide that a lot of the analysts like. It's a very nice summary of on the horizontal where do we have our capital and then on the vertical, what return it creates. Most of our life insurance operations create fantastic ROE. Now obviously, we have very strong ALM capabilities. We try to manage capital to the minimum required while still keeping everybody happy. But it's also a structural thing that life insurance actually doesn't require that much ongoing capital. A lot of the money -- capital is required, almost working capital upfront to pay the commissions. So if you have got a mature life company like we are, where the current level of commission paid is quite low compared to the current level of the book, you structurally have quite good ROEs in those businesses. If I think of what's changed in the last 12 months, Guardrisk has continued to improve. Momentum insurance obviously made a big jump from the yellow to the green. I think it might be quite hard for one to stay in the green next 12 months. But definitely in '27, we would want it to be in the green. Africa, I mentioned earlier, that ZAR 4 billion is earning maybe a 10% return. We need operating profitability to improve substantially to get into the green, and that's the plan. I mean we're not just going to sit with this. Maybe the last thing to mention here is we've got ZAR 7 billion sitting in shareholders earning cash type returns most of the time. So the key thing on that ZAR 7 billion, I mean, we could invest in something exotic, I don't know, but we won't do that. So the reality is we need to minimize that ZAR 7 billion. I think a normal level of cash and capital at the center will be about ZAR 4 billion for us. So we're probably holding double the amount of capital at the center than we would normally want to. Cash generation. So the South African Life businesses, Momentum Retail, MetLife, Momentum Corporate, annuity book, they all sit in the same license, same legal entity, that's the SA Life business, paid ZAR 2 billion dividend to the group. Every period, the life company is the main source of cash coming into the holding company bank account. Insurer paid a good dividend. Thank you, ZAR 315 million. Guardrisk Investments and health are steady dividend payers. You'll notice that Africa doesn't feature this year. We took out big special dividends a few years ago out of Africa. But at the current level of operating profitability, we actually don't really have dividends coming through from the African countries. But overall, we still sit on dividend income for 6 months of ZAR 2.6 billion. That is about 75% of earnings. I think in a normal period, it's not a bad ratio. If somebody asked me, how much of your NHE is cash available at the head office, I would say 2/3 to 75% is the right number in most periods. So it's quite representative. In the 6 months, we did not spend much money. So we did very little M&A. We did inject capital into India. So there were certain rule changes in terms of how premiums are recognized over the contract term, also fast growth. It still left us with ZAR 2.3 billion of cash at the center, which we're planning on spending ZAR 1.2 billion in the dividends and ZAR 1 billion in the buybacks. And then there will be a small amount added to the center, which at some stage, we're going to have to go back to the negative ZAR 873 million because like I said, we're starting to hold a bit too much capital at the center. Other topical matters. I got 14 seconds, I'm joking. I'm going to go over a little bit here. But again, performance optimization project, this is a very, very critical project. When we gave you that ZAR 7 billion target a year ago, we knew behind the scenes, if we don't deliver this, we're not going to deliver the ZAR 7 billion. So this is getting significant attention. What I'm showing there is in blue, those are the savings we have or the optimization we have bank to date. ZAR 42 million looks quite small, but I wanted to show it here because there's a reality that these things take a time to put into play. What is quite nice is we've got ZAR 841 million of like 100 different work streams we're working on, where we think we can save another ZAR 840 million. We still need to find about ZAR 120 million of ideas to get to the ZAR 1 billion. But over time, I'm hoping in June, you're going to see the ZAR 42 million jump a lot. And hopefully, that ZAR 841 million gets topped up a bit by new ideas. Just to give you also a sense of what we're doing. I mean a lot of these are productivity ideas more than just cost-cutting ideas. So we'll talk about the bank -- the 3 bank savings here, each of them are just over ZAR 10 million. So firstly, we decommissioned the remaining group activities in Metropolitan, which is a direct-to-consumer business. Cloud infrastructure, I don't know if rightsizing is the right term, but the way I like to explain this is because cloud is a bit new in some areas, different business areas were buying computing, networking, storage separately. And all the areas we like paying retail, we now centralized where we buy our cloud services as a group, and we then allocate it out. So maybe sometimes guys need to top it up with some 5% retail fees, but at least we're paying wholesale for 85%, 90% and retail for the remainder. I mean that alone is, I think, a ZAR 14 million saving annualized. Also, we had a variety of learning platforms in the business units. Now we're moving to the -- what we think is the best of them. Then if you look at the stuff we're working on, guy runs this program, and, who became a father yesterday, congrats. Yes. He's given me the most imminent ones rather than the biggest ones. So we'll start there. We basically -- this week, next week, we're signing new agreements with like cleaning services, courier, marketing, background checks. That adds up to ZAR 40 million. So immediately, that blue doubles through those new contracts. We are pushing back hard on some software providers, and we're also pushing back internal some software users. If you do PDF a year, we're not paying Adobe Pro license for you, okay? New global operating model, that's actually also happened. So that's going to go into the blue. So there's going to be some savings with the new way investments is structured. And the last one here also about ZAR 10 million saving. Service model in metropolitan sounds very generic. I'm going to add to it. So what's happening here is we're using RPA, robotic process automation to pay surrender claims. And we're using another RPA tool to actually check the payments. So I was joking at the audit committee that historically in accounting, you always had this 4 eyes principle like the payer and the check. Now we've got one robot paying another robot checking. Hopefully, they're 2 honest robots. Anyway, okay. So there's a lot of interesting things going on here. And this is a mega project. Okay. The last 2 slides. I always like to add something a bit new here and educational. So I was paging through the quarterly returns, which I told the prudential yesterday, at least I know I read them. I was paging through the quarterly returns, and we got a lot of good data in terms of our business, and we often don't share it. So I thought let me take something out here. It will give you a feel of size of our activities, and it will actually tighten on the financial numbers just now. So in our retail South African Life business, we've got 3.3 million policyholders. There's 440,000 Myriad policyholders, paying about ZAR 2,000 a month in average in premiums. We've got 840,000 funeral policyholders in Metropolitan, paying about ZAR 400 on average. 400 sounds a bit high, but also reflects the fact that I think Met operates a little bit higher in the income range than some of the other competitors in this market. Endowments, 1.2 million of them. My first job was at Norwich Life in '94 in Claymont. And actuary worker told me endowments won't be around in 20 years. Unitrust will do it all. And now we've got 1.2 million contracts 31 years later. Average premium is actually quite low here because a lot of these are paid up. So that's the one sad reality of a lot of the endowments, A lot of the contracts were paid up. RA business quite steady, probably about ZAR 800 a month average contribution. Universal life shrinking at 4% in 6 months. I mean this is a close book. Also note, the 100,000 contracts is 3% of ZAR 3.3 million. So the number of contracts is the same as the CSM 3%. So it's quite nice how these operational metrics tie up to some of the financials. And then annuities with 170,000 annuitants, they average more than ZAR 1 million each, okay? So we only sell 1,000 annuities a month, whereas we sell 1,000 other policies a day, okay? But the average size illustrates how important each annuity is. If we start selling 100 or 200 less annuities a month, we'll notice. We sell 100 to 20 less funeral a month, even feeder notice, I don't think, okay. Now if the policy count is flat, why is our business growing, okay? It's because the average policyholder is paying us more, okay. So the premium income is growing while the policy count is flat. And I think Myriad is a beautiful example, might be the only example I'm 5 minutes over, is in this 6 months, the in-force premiums in Myriad went from ZAR 9.6 billion to just sort of ZAR 9.95 billion. Again, annualized growth of 8%, on a flat book, why is that? It's because of a very good alterations experience. Okay. I mentioned -- we often mention, we say things like alteration experience positive, good alterations. This is a good example. That's annualized ZAR 900 million of new benefits bought. okay, in 6-month period. Now that growth rate of 8% is equal to the 8% CSM growth earlier, okay? So it ties up nicely. And on the flat policy count, we're seeing CSM growth. Funeral, what you're seeing here that on funeral, even though the policy count is slightly down, in-force premiums are slightly up, it's because the new business is coming at higher average premiums and the business going out. Also, as the quality improvement kick in, the exits will drop from 450 to like 350 over time, and this book will start growing decently. Maybe the only other one to mention here is Universal Life. Life, we do have one product open still at Universal Life. If anybody is really interested, I'll tell them in one-on-ones. But because a lot of this business is so old that the exits seem to be maturities, it tends to be planned exits. The persistency is actually good in this book. So the premiums are not growing -- falling off at the same rate as the policy count. Okay. So I don't think I'll ever show this again, but this was just a fun little run through our landscape. And I just want to also make the point that the CSM growth rates are not as random. They're actually very well tied up to the premium and asset growth in the different product lines. Okay. Then just in conclusion, these are excellent financial results. Operating conditions were favorable, but the phrase I used a lot lately is we make our own like we have lots of different businesses here. Nobody dropped the ball. Nobody had an own goal. Nobody shopped themselves in the foot. Everybody took advantage of the cards were dealt to them, okay? And that's why we achieved the growth we got. Had we had 1 or 2 own goals, maybe the 42% would have been 22%, who knows, okay? So excellent performance from all the business units. Very happy with the Momretail VNB improvement. Johann knows, but it was like one of the most common questions always was, why isn't VNB negative in Momretail. So I'm glad that's been now dealt with. But there are other areas where VNB requires work. Excellent cash generation, very strong balance sheet. Something we have to do for the Board is we have to do reverse stress testing. We have to think of scenarios where business goes insolvent. You need a good imagination. I think we can stand something like 80% decline in markets. It's getting very difficult to figure a scenario where we can bank up this business, both in solvency and liquidity. And then very importantly, congratulations to our employees. I used the words a lot today about positive market variances, terrible weather, good mortality claims, equity markets on. In't forget that the main reason for the earnings growth is there's 15,000 people here who work very hard and pull in the same direction. So let's just remember that, that the main reason the results are good is because the employees doing what they should do. Okay. And then obviously, a big thank you to all our other stakeholders like clients and advisers. Okay. Thank you, and I'll hand over to Dan.

Thank you very much. As usual, it's time now for some questions and answers from the analysts that have come through our streaming service. A couple of them are -- I think we're going to be getting you to answer them. There's also some that I'll get to. But let's start with those that are for you, Risto, and then take them one by one. From Roosendaal Partners, we've got a question by. He says, can you provide some color on the improvement in business quality in Metropolitan? Persistence experience in this market seems to have varied quite widely between different players in the industry in recent months. What has driven the good result in Metropolitan? And why are some of the others struggling on this front?

Yes. I mean, Peter is here as well. I don't know if Peter, do you want to answer that because…

Thank you, Dan. Okay. I wasn't hearing myself. So when we started with the 5-point plan, the one key thing which we needed to make sure that we address was the quality of business. And there were a number of things which we said these are the stuff that are going to improve. One, at that time, our NTU, they were very high. But on the other hand, we had to go back and say, can we make sure that when someone has written a policy, we do not go ahead and pay them the commission if we haven't received the first premium. Just by doing that, you reduce your own NTU. And in the end, the persistency also moved into the direction where we wanted. Secondly, -- the biggest challenge we were having was the open plan, open funeral schemes, wherein the persistency has been very bad. We reduced the amount of commission we pay you if you write there, which then forces you to go back to the worksite. And where we have worksite because of the relationship that we have with those people, then we always have much better persistency. Now people were directed to go to the worksite. We were also managing them in the worksite and the reduction of the N ensured that we can be able to see a far much better quality of business.

Thank you very much, Peter. You can get more color than that. And the next question is from JPMorgan. Actually, there's 2 questions that are linked. I'm going to ask Risto -- it's JPMorgan and all-weather Capital. One is Baron Nkomo and the other one is Jarred Houston. A lot of capital is being used for share buybacks, which hopefully will continue helping the share price discount to embedded value. Why not invest some of the capital in new growth vectors like building your own bank or through M&A and given the structurally high return, what level of discount to EV are you prepared to buy back shares? It's 2 in 1.

Yes. So funny enough, we would like our businesses to consume more capital. So the one challenge Janette has made to all the business units is to maybe look harder for organic growth opportunities rather than always M&A. On the M&A side, we actually continue to do quite a few small deals behind the scenes. I'm looking at Lawrence, he's coming with 2 small deals now as well. But the deals that are so small. We don't tend to shout to the world about it, but I'd much rather do 5 deals of ZAR 200 million at 40% IRRs than one big deal you hear about every 2 years on a 10% IRR. So I think we're actually getting a very good return on the small-scale M&A we're doing continuously. I think we're getting an average IRR well over 20% on that. So we're doing a little bit of that. In terms of a bank, I think we generally have a view that building a bank to protect your insurance business is not the right strategy. I mean, obviously, most of our peers disagree with that. But I think building a competitive bank is not easy, and the capital amounts are very large. And yes, committing ZAR 5 billion to a 12% ROE to protect the life business is just not going to -- doesn't make sense. We continue to look at bigger M&A as well. We have -- basically, every asset you've seen our competitors buy, we've been in the process, but we have very strict guidelines for ourselves in terms of what is an acceptable return on capital. At this stage, it looks like most of our competitors are prepared to accept slightly lower IRRs than we are or maybe they have more optimism about the future, who knows. But we will continue to look out for opportunities. We will continue to encourage business units to ask for money rather than give back to us. But if they ask us money to build a bank, we'll probably say no. Discount to EV. Now the answer obviously depends a little bit on what do we think the sustainable return on embedded value is. So at the moment, let's say, I assume the sustainable discount on EV is, let's say, 13.5% and the discount is 25%. It means we'll be earning about 16.5% on buybacks, which I still think is a reasonable return in light of the quality of the earnings stream we're buying. We know what we're buying and it's cash generative and things like that. We will ask shareholders' opinions as well. At this stage, I would guess we'll buy back to close to 90% of EV. Last time we sort of canvass our shareholders on buybacks, they're very supportive of continuing buybacks rather than special dividends. I think the one promise we had made, we'll never hold the cash for very long. So if we don't do buybacks and we have excess capital, we'll do special dividends. So it's really a question of when do we switch over from one to the other.

There's a question about Africa, the operating model review that you mentioned, if -- the question is from Jared Houston -- all Weather Capital. If this review results in a decision to exit, what is the quantum of capital that would be fed up?

Yes. I think I'll answer it shortly by saying exit unlikely, highly unlikely. I think it's more about reinvigorating the business. Now obviously, if we think the return on capital forever is 10%, we will start working on the exit. But our latest plans aim to improve the ROE quite a bit. I ask the question in 5 years if the ROE is still 10%. But for now, we're staying in Africa.

In Africa. And Marius from Austin Lawrence says, well done with an excellent set of results and your insightful IFRS 17 granular and key metrics disclosure, Risto. He says you're carrying India at only ZAR 2.6 billion with breakeven imminent, how much valuation upside is there, including with reference to listed peers? I tell him not to move.

Marius, thank you. That's a very kind question. Yes. I mean we all know that India is like the most exciting place for capital right now globally. So the valuations are very high. I'm glad you're asking the question compared to listed peers because at least we've got some metrics. I mean, in India, the insurance companies tend to trade on multiples of premiums, not multiples of profits. We get feedback from our India team every 6 months or so comparing our valuation to the listed companies. On that basis, that ZAR 2-odd billion becomes closer to ZAR 5 billion to ZAR 6 billion. So the current view is that if we were to list the business, we will probably get back 2 to 3x the capital invested. So that will be -- yes, obviously welcome. I think the IPO is not imminent. Obviously, we would like to do an IPO in due course. But let's hope the India multiples are where they are now when we do the IPO. But good question from Marius. It's true. If you apply India valuation to that business, it's substantially more than the historic cost than we're carrying it.

Okay. Two last questions for you, Risto. Metropolitan, again, what level of NHE could you achieve if you get the VNB margin above 4% -- that's from Warwick Bam.

It also depends when you get to the 4%. Yes, probably ZAR 800 million. I mean it depends like if I think in 2 years from now, yes, it could be there.

Okay. And then we've got Ocean Capital. Roy Long wants to know that the commentary notes yield curve shifts contributed to earnings in this period. Are you able to give a value of these gains? It looks like the yield curve has shifted in the opposite direction post the reporting period.

Yes. So we mentioned market variances of about, let's say, just under ZAR 600 million. Probably ZAR 100-odd million is credit outcomes better than expected, maybe another ZAR 100 million is from equity markets, maybe another ZAR 100 million from higher working capital interest. Yield curve is probably half of that, so ZAR 250 million to ZAR -- the curves have moved back a little bit since year-end. What I noticed when I looked at the data is the yields actually continued falling in January. And then when the issues with U.S. started, they sold out. So they're up a lot from the bottom in January, but they're not up as much in the year-on-year. We do get a monthly report from the ALM team and the ALM result is not that poor for the first 2 months of the year. So Royce, I would say worst case outcome, we go from positive 250 to maybe minus 150. Also, what's maybe important to note here is we are running a lower ALM mismatch across our book than we were under IFRS 4 results. So that means our hedging activities tend to be a little bit more I say we tend to hedge out more volatility.

Okay. Thank you. You can have a seat. I think I squeeze enough out of your team. The next question, the last 2 questions are going to go to Janette. Jeanette, the question comes from RMB Morgan Stanley's Baum. Where are you experiencing the most competitive pressure? And do you think this competitive pressure could have a meaningful impact on sales volumes in the next 6 months?

My whole team is here. I'm waiting for someone to jump up. Because I mean, that's what they say every day. Like everyone is always morning and saying we're not winning and then we are. I think in Dumo's world, for sure, we see actually not as much activity in terms of new business, but actually a lot of requoting and the margin pressure there is definitely now Dumo did start telling us this 2 years ago. It hasn't yet come through. And between me and Risto, we keep on telling him hold on as much as you can. But I think in Dumo's world, certainly, probably the area that we see most of that pressure coming through. You only asked me to answer it for one, so I think I'll stick to that one. Sadly, I think in the investment world, the investment world is always competitive. It always has been. But again, our business seems to be doing really, really well and holding up in terms of that very well.

Okay. Last question from an employee as we close. Risto did thank the employees for their role as well in contributing to the set of results. One of our call centers as an employee wants to know, and this is what -- and I'm quoting, we have worked hard over the 2 parts. Are we worried about all the money going out?

Of course, we are always worried about the money going out. But I think from my heart that's with clients, we're probably more worried about the impact on clients' ability to retire in the long run than what we are worried about our bottom line. So the outflows for us has actually been quite a bit less. Rowan is here. He quoted a number yesterday, I've forgotten, probably about 30%, 40% lower than what we modeled way back when we were still anticipating and building. So it has been lower. But I think the great concern for us is the number of clients. What is it? -- over 400,000 clients who actually came and made withdrawals. We've also seen a pickup in activity now from the 1st of March, by far not as much as it was in September. But what is concerning is that it is actually clients returning for the second time. And if you then think about the fact that, that average age is 45 plus, it does not leave those clients with a lot of time to actually then make up again for the money that they've withdrawn. So at the moment, I can honestly say we've not felt, and you can see it in the results that it had a massive impact on us as a business and our profitability, but we certainly are worried about the well-being of clients.

Thank you very much. Jeanette give you a round of applause, and thank you to Risto as well. Thank you very much. Well, I mean, yes, we've come to the end of the presentation and the question and answers and thanks to the investor analysts and everybody who's asked the question and the employee as well. But it is a long weekend with Human Rights Day tomorrow. I'm sure many of you have got plans, be safe, enjoy. And once again, Jeanette and your team, well done on this excellent set of results. I'm using the word exceptional. Thank you very much.