Ghana leads the way for Metropolitan in Africa

Ghana has emerged as the top performer in Metropolitan Holdings Limited's Northern African operations, just two years after its establishment. Metropolitan CEO Wilhelm van Zyl, who is currently visiting the Metropolitan operation in Ghana, says that the group financial statements for the six months to 30 June 2008 show that total operating profit increased by an impressive 10%.

Metropolitan Life Ghana is a joint venture between Metropolitan Insurance Company Limited of Ghana - with its local market knowledge and expertise - and Metropolitan Holdings Limited of South Africa, a Johannesburg Stock Exchange-listed company that has been doing business in Africa for more than a century.

The established businesses in Metropolitan's international operations showed an equally pleasing 17% rise in annual premium equivalent (APE). (APE is a measure representing 100% of recurring premium income but only 10% of single premium income, given that the latter is far more volatile by nature.).

The South African company, with its head office in Bellville, Cape Town, has offices in Namibia, Botswana, Kenya, Nigeria, Lesotho and Swaziland as well as in Ghana.

Diop Frimpong, MD of Metropolitan Life Ghana says, “My vision is for Metropolitan Life Ghana to become the insurer of choice when it comes to financial services. We have a wide range of products developed to satisfy all risk and financial needs, a state of the art administration system, tried and tested processes and knowledgeable, well trained and highly motivated staff.” Frimpong continues “Our offerings include both individual (savings and risk products) and business solutions (credit life insurance, group life and disability and group funeral scheme products).”

Van Zyl, who was appointed group chief executive of Metropolitan Holdings Ltd in April 2008, had reason to be pleased with the operational performance of the company at his first set of financial results earlier this month. The group’s ability to maintain positive cash flows has been, and continues to be, in striking contrast to industry norms of recent years, reflecting well on the resilience of the Metropolitan brand.

Metropolitan’s core values focus on people, trust and performance and these themes shape the way business is conducted. These values are driven through its corporate social investment projects and sponsorships that focus on education, health, economic empowerment and youth development as a business and socio-economic imperative. The Metropolitan brand is particularly strong in the lower and low middle-income focus markets, with BrandMetrics valuing the company's brand at US$0.5bn in 2005.

As Van Zyl points out, “Together we can” is not merely a tag line for Metropolitan: “It's a way of life for the company and the communities within which it operates across the continent. Our business in Africa assists us in achieving Metropolitan’s vision of creating prosperity for Africa’s people and contributes to the local economies by creating wealth and job opportunities.” “It is strategically significant that our core profits came from different areas across the group,” Van Zyl said. “The fact that retail managed to maintain persistency levels despite increasing pressure on personal disposable income due to higher food and fuel prices was also a first-rate achievement.” Van Zyl attributes this success to proactive management interventions, including concerted efforts aimed at enhancing the value proposition for clients together with an even sharper focus on intermediary training.

The group’s diluted core headline earnings per share increased by 14% from 61.28 cents to 70.03 cents, with most of the group’s businesses increasing their contribution to operating profit.

In addition to a 39% increase in single premium income, the retail cluster recorded growth in new recurring premium income of 15%, resulting in a 21% increase in APE.

Metropolitan’s total recurring premium income, the lifeblood of any life insurance company, was 6% up on the corresponding period in 2007. While Van Zyl is pleased with the way Metropolitan has continued to lift its operational performance “irrespective of the uncertain times”, he acknowledges that there is scope for further improvement in terms of efficiencies and even tighter expense controls.

Looking to the future, Van Zyl comments that “Metropolitan’s entrenched position in the low and middle income markets continues to give us a competitive edge.”

Van Zyl said the group would continue with its strategy to expand further into the rest of Africa and introduce new products to its existing clients. “Metropolitan has embraced the growing convergence between retail investments and transactional banking. We have new ventures lined up in Kenya, Ghana, Nigeria and elsewhere in West Africa which present opportunities for us as a group,” he said.