MMI Holdings Investor Conference. Hillie Meyer 15 October 2018

Transcription

1 MMI Holdings Investor Conference Hillie Meyer 15 October 2018

2 Reset and grow Reset Grow Fix the basics Address cost base Distribution Products Service Marketing

3 Earnings reset and grow R4 billion R3.6 billion R2.8 billion R million

4 Group-wide Reset progress Strengthen senior leadership Revisit Sandton head office Cost savings

5 Momentum Retail Reset progress Full value chain Reshape distribution channels Improve client service Scale back UK presence Wealth platform fees

6 Metropolitan Retail Reset progress Stabilise sales force System migration Upgrade points of sale

7 Momentum Corporate Reset progress Full value chain responsibility Strengthen leadership team Rebuild distribution Improve underwriting experience

8 Health Reset progress Systems consolidation Public sector value proposition BEE transactions

9 Africa Reset progress Exit selected countries In-country governance and control Strengthen leadership teams Finalise operating model

10 Guardrisk Reset progress Reprice loss-making schemes

11 Momentum Short-Term Insurance Reset progress Full value chain responsibility SA focus only Exit car dealerships Enhance pricing and underwriting capability

12

13 MMI Holdings Investor Conference Reset & Grow Financial projections Risto Ketola 15 October

14 Agenda Part 1 The really big picture Part 2 Stylised explanation Part 3 Business unit contributions to Reset & Grow financials Part 4 Head Office & Group Finance role Part 5 Closing comments

15 The really big picture

16 Core headline earnings Past and projected R million Core headline earnings F2014 F2015 F2016 F2017 F2018 F2021

17 Normalised headline earnings Past and projected R million Normalised headline earnings F F F F F F2021 Assumptions for Normalised Headline Earnings projection Actual investment return in line with assumed returns No material assumption changes No material non-recurring items

18 Value of new business Past and projected R million 1200 Value of new business F2014 F2015 F2016 F2017 F2018 F2021

19 New business margin Past and projected 2.0% 1.5% 1.9% 1.9% New business margin 1.6% 1.3% 1.0% 0.5% 0.7% 1.1% 0.9 % 0.0% F2014 F2015 F2016 F2017 F2018 F2021

20 Stylised explanation

21 Where does the additional R1bn* earnings growth come from? R100m R100m R300m R1bn R500m Cost efficiency Short-term insurance Losses on new initiatives Other F2018 earnings R2.8bn F2021 earnings R3.8bn CAGR = 11% * R1bn reflects core headline earnings growth from R2.8bn in F2018 to the midpoint of the R3.6bn R4.0bn target range in F2021. All amounts reflect the after tax contribution over the three years to core headline earnings.

22 Where does the additional R1bn* earnings growth come from? R100m R100m R300m R500m R500m Cost efficiency Short-term insurance Losses on new initiatives Other F2018 earnings R2.8bn F2021 earnings R3.8bn CAGR = 11% * R1bn reflects core headline earnings growth from R2.8bn in F2018 to the midpoint of the R3.6bn R4.0bn target range in F2021. All amounts reflect the after tax contribution over the three years to core headline earnings.

23 How we will achieve the cost efficiencies R billion 12.0 Controllable costs CAGR REAL SAVING ± inflation %-4% % 2.2 F2018 F2021 Head office functions Product & service Distribution & sales * *Before tax F2018 costs R9.1bn F2021 costs R10.2bn CAGR = 4%

24 Where does the additional R1bn* earnings growth come from? R100m R100m R300m R800m R500m Cost efficiency Short-term insurance Losses on new initiatives Other F2018 earnings R2.8bn F2021 earnings R3.8bn CAGR = 11% * R1bn reflects core headline earnings growth from R2.8bn in F2018 to the midpoint of the R3.6bn R4.0bn target range in F2021. All amounts reflect the after tax contribution over the three years to core headline earnings.

25 Short-term insurance (Guardrisk and MSTI) Core headline earnings history F2014 F2015 F2016 F2017 F2018 Key drivers Double digit revenue growth in both Guardrisk and MSTI Increased underwriting risk retained by Guardrisk MSTI claims ratio between 60% and 65% F2021 Core headline earnings target R480 Key risks MILLION - - PA 30% 40% CAGR over 3 years R540 More severe claims environment for both businesses Both businesses assume further market share gains Regulatory environment for Guardrisk MILLION

26 Where does the additional R1bn* earnings growth come from? R100m R100m R300m R900m R500m Cost efficiency Short-term insurance Losses on new initiatives Other F2018 earnings R2.8bn F2021 earnings R3.8bn CAGR = 11% * R1bn reflects core headline earnings growth from R2.8bn in F2018 to the midpoint of the R3.6bn R4.0bn target range in F2021. All amounts reflect the after tax contribution over the three years to core headline earnings.

27 New initiatives New initiatives F2014 F2015 F2016 F2017 F F2021 Core headline earnings target -R310 MILLION to -R270 MILLION Roughly R100m improvement on F2018 losses over 3 years Key drivers Materially lower India losses expected by F2021 Losses in ayo and Money Management sharply lower by F2021 No further large initiatives assumed Key risks India projections highly dependent on favorable claims ratio outcome Consumer behaviour assumptions in Money Management ayo still in early stages = high forecast risk

28 Business unit contributions to Reset and Grow financials

29 The assumptions underlying the F2021 targets Muted revenue growth assumed in mature business units Strong revenue growth in STI and new initiatives Expenses in head office support functions remain flat Experience variances in line with recent history Investment returns projected at same rates as used for EV No material assumption and other basis changes

30 Momentum Life* Core headline earnings history F2014 F2015 F2016 F2017 F2018 *Majority of Multiply costs are aggregated into Momentum Life results Key drivers Growth of distribution bandwidth Superior service, technology environment and Multiply are key differentiators Ongoing product innovation F2021 Core headline earnings target R950 Key risks MILLION - - PA 7% 11% R1 050 CAGR over 3 years Highly competitive market segment Projections assume well below inflation expense growth; re-engineering Mortality and morbidity experience assumed to remain favourable MILLION

31 Momentum Investments Core headline earnings history F2014 F2015 F2016 F2017 F2018 F2021 Core headline earnings target R590 MILLION - - PA 7% 11% R650 CAGR over 3 years MILLION Key drivers Improved LISP market share Re-establish Momentum Investments as a credible investment brand Maintain strong position in structured products Key risks Assumes normal market conditions Investment performance has impact on flows potential Assumes stable fees after the recent round of fee reductions

32 Metropolitan Retail Core headline earnings history F2014 F2015 F2016 F2017 F2018 F2021 Core headline earnings target R610 MILLION - - PA 0% 3% R670 CAGR over 3 years MILLION Key drivers Assumes modest increase in agent productivity Lapse rate in line with new assumptions Allows for significant investment into upgraded branch infrastructure Key risks Weak distribution performance could see VNB stuck at current levels Expenses outside of branch costs assumed to grow at below inflation New entrants into the market segment

33 Momentum Corporate Core headline earnings history F2014 F2015 F2016 F2017 F2018 F2021 Core headline earnings target R690 MILLION - - PA 6% 10% R770 CAGR over 3 years MILLION Key drivers Assumes normalisation of underwriting results by F2020 Maintenance of high market share assumed in new business flows Assumes that GEMS retained in Health business Key risks Inherent volatility of new business flows Recent hardening in prices not guaranteed to continue in commoditised environment Health business revenues concentrated around few key clients

34 Africa Core headline earnings history F2014 F2015 F2016 F2017 F2018 F2021 Core headline earnings target R220 MILLION - - PA 14% 22% R270 CAGR over 3 years MILLION Key drivers Namibia to recover from weak F2018 Ghana expected to continue recent positive trends Assumes that we complete earmarked exits in F2019 Key risks 70% market share in Lesotho will attract competition Recent launch of Wealth and Unit Trusts offering in Namibia = forecast risk Prone to surprises

35 Shareholders Core headline earnings history F2014 F2015 F2016 F2017 F2018 F2021 Core headline earnings target R520 MILLION - 8% 11% R570 - PA CAGR over 3 years MILLION Key drivers Assumes stable money market rates Investable assets driven by retained earnings Assumes tight control of head office costs Key risks Reinvestment risk as most assets are floating rate instruments Outcome on 102 Rivonia important Could be impacted by overruns on special projects (e.g. IFRS 17)

36 Head Office & Group Finance role in Reset and Grow financials

37 New governance structures Capital & Investment Committee Formal (sub) committees of MMI Executive Feedback loop to MMI Board Supported by improved Business Performance Management

38 Business Performance management Stakeholder Engagement Investor relations Regulatory engagement Internal stakeholders Strategic Execution & Intelligence Balanced scorecards Financial planning and forecasting Performance based remuneration Competitor analysis Enable appropriate business decision making Strategic Reporting Results announcements and trading updates Regular Executive and Board level financial and operational performance reporting

39 New financial planning approach Drive forward looking budgeting and financial planning Design rolling forecasts across all business units to replace cumbersome annual budgeting process Longer term outlook of projected earnings; main focus on three year projections Greater focus on expense forecasting to contain costs Identify key assumptions by business unit to inform improvement to management accounting

40 More dynamic financial management

41 Performance based remuneration Incentives linked to performance measured through Balanced Scorecards Balanced Scorecard Short Term Incentive (STI) Objective Weighting Financial 60% BU STI Normalised Headline Earnings 30% Value of new business 15% Return on Embedded Value 15% BU STI BU STI Strategic 30% Client outcomes Distribution capability Exit loss making Africa operations Success of new initiatives Transformation 10% Balanced scorecard monitored at Group and business unit level BU STI BU STI BU = Business Unit Group performance determine overall STI pool Business unit STI pool tilted due to its performance Individual STI adjusted for own performance Governed by MMI Board Remuneration Committee

42 Additional comments

43 Capital distribution Complete buyback program by December 2018 Reinstate interim dividend at the interim stage (early-2019) Target dividend cover of 2.5x Normalised Headline Earnings (NHE) within target range of 2.0x to 3.0x New dividend cover range is wider than in the past due to NHE being inherently a more volatile number than core headline earnings were Plan to apply same policy to interim and final dividend Payout ratio driven by projected balance sheet results; things could look different once we are through the significant investment into new initiatives

44 Capital position under SAM As at 30 June 2018, MMIGL had a SCR cover of 1.93x Solvency Position SAM basis Eligible own funds Solvency Capital Requirement (SCR) Excess own funds Solvency ratio before foreseeable dividend Solvency ratio after foreseeable dividend 30 June 2018 R million x 1.88x

45 Questions?

46 MMI Holdings Investor Conference Momentum Retail Jeanette Marais Johann le Roux Zureida Ebrahim 15 October

47 Distribution Brand Service Introduction Momentum Retail Product houses Resetting our strategy for growth

48 Reset Establish business unit focus Reshape channel sales Fix service experience Commercial ethos Winning culture Business unit accountability Growth in adviser support Product innovation Improved client engagement Digitisation Grow

49 Momentum Retail structure Jeanette Marais Zureida Ebrahim Johann le Roux Investments Transactional banking Insurance Marketing Client delivery Channel delivery Momentum Intermediary Solutions Momentum Securities Multiply Investo & Traditional Momentum Financial Planning Momentum Short-term Insurance and Health are included in the product offering even though they form part of different reporting structures.

50 Brand Introduction Momentum Brand Service Product houses Reinventing our brand and creating visibility Distribution

51 Day and Night Your world never stops turning. It s called Momentum. Contact your financial adviser or go to momentum.co.za Momentum, a division of MMI Group Limited, an authorised financial services and credit provider. Reg. No. 1904/002186/06 Licence 6406

52 You are born with it. It s called Momentum. +57% 5 Aug Aug Sep Oct 2018 Source: Google Trends. Weekly Google searches for Momentum for South Africa only.

53 Reset Financial Wellness Sponsorships Multiple brands Brand visibility Optimise marketing spend Differentiated positioning Consumer brand building Grow

54 Brand Introduction Client experience Service Product houses Unwavering focus on service excellence Distribution

55 Reset Service focus Proximity to business units Engineered service experience Systems and processes Training Knowledge levels Recruitment discipline Intelligent data Ease-of-business Grow

56 Our Service Journey Calls answered within 20 seconds 61 % 54 % 48 % 37 % 37 % 34 % Apr Jul Sept Lost call rate Jul % Sept % Minutes to answer an min target 72% improvement 314 May June July August September IFA Service Feedback Excellent 3.16 Good Poor Sanlam Momentum Discovery Old Mutual Liberty Source: SBG Securities, IFA Survey. Sept 2018.

57 Brand Introduction Product innovation Service Product houses A focus on building market-leading products Distribution

58 Momentum Investments Jeanette Marais

59 Momentum Investments Platforms Investment management Momentum Wealth Momentum Wealth International Retail Enhanced Target MIC Global OBI OBI Institutional Factor Target Building blocks Guarantees and annuities Securities IM Partners 388 full-time employees 7 years average tenure at MMI degree honours masters phd 1.6% 0.3% 7.6% 27.9%

60 Financial history in need of a reset R597 million R647 million R 652 million R689 million 30% earnings reduction from four year average R479 million

61 Momentum Investments model Distribution Institutional Support Platform(s) (local and international) Client Service Retail Product wrappers ManCo. (local and international) + Investment management Local and international Marketing Finance Product Development Technology Governance Human Capital Investment Consulting Securities

62 Our objective is simple Keep clients invested and focused on their investment goal(s) More predictable returns Returns Reduced price fluctuations Outcome-based solution Active manager Index manager Term Note: For illustrative purposes only.

63 Momentum Outcome-based Solution range Active Momentum Enhanced Cautious Growth Momentum Target Cautious Growth Momentum Enhanced Stable Growth Momentum Target Stable Growth Momentum Enhanced Diversified Growth Momentum Target Diversified Growth Momentum Enhanced Growth Momentum Target Growth Momentum Enhanced Growth Plus Momentum Target Growth Plus Passive bias Momentum Property Momentum Outcomebased Solution Deep value equity Investment horizon Emerging market fixed income (CPI + 5%) US equity Bio-tech CPI +2.0% net of fees CPI +3.0% net of fees CPI +4.0% net of fees CPI +5.0% net of fees CPI +6.0% net of fees

64 But are we any good at it? 18% 16% 14% 12% 10% CPI +6% rolling returns Momentum Enhanced Growth Plus 94% Momentum Enhanced Growth Plus hit rate versus CPI objective 25% ASISA MA High Equity hit rate versus CPI objective 8% ASISA Multi-asset High Equity average 6% 4% 2% 0% Annual returns relative to CPI +6% 73% Momentum Enhanced Diversified Growth hit rate versus CPI objective 55% ASISA MA Medium Equity hit rate versus CPI objective -2% Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17 Jan 18 Mar 18 May 18 Jul 18 Source: Momentum and Morningstar. Returns from Oct 2008.

65 Momentum's investment platforms Local International Competitive advantages R2 bn Personal Share Portfolios (PSPs) Pricing competitiveness Fund availability Breadth of product range Offshore flexibility DFM and model functionality Paperless new business Offshore endowment wrapper Personal Share Portfolios (ipsps) Broker funds and model availability Fund availability Breadth of product range DFM functionality Fee special offer $2.2 billion 1-1 Net flows Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q3 Assets under administration (USD billions) Source: LISPA and Momentum.

66 Platform focus areas Wealth Wealth International Ease-of-business Multiple pricing generations Perceived complexity Service Reset International narrative Capability awareness International share portfolios Streamline processes Technology Operational stability Competitiveness Bolster distribution Gross and net flow targets Distribution support Remove complexity Externalising assets Digital adviser ecosystem Paperless new business Tools and calculators Grow

67 Our approach is simple Assets under administration Enhanced earnings X Percentage managed in-house =outcome 3.3 Investments and Savings product design rating Ready to start winning back platform support Momentum in-house penetration 50% 50% 45% 43% 40% 35% 30% 27% 25% 20% 18% 15% 32% 31% 10% 5% 12% 17% 0% MFP MC IFA Total As at Oct Including Money Market Old Mutual Sanlam Momentum Discovery Liberty Source: SBG Securities IFA Survey. Sept 2018.

68 Key business focus areas Client service Ease-of-business OBI narrative Reset Retail Distribution OBI and platform(s) support Marketing Institutional Distribution expansion Client service Rebuild brand Platform strategy MMI Balance Sheet Retailisation Investment Management Capability set Operational stability Partnerships Cost efficiencies Income enhancements Third party sales Grow

69 Growth strategy - Back on track R597 million R647 million R652 million R689 million 11% 7% per year R650 R590 million R479 million

70 Reset Focus on net flows Steady loss of market share Unknown investment brand Lackluster new business growth Negative net flows Once-off earnings deferred symptoms Distribution and service overhaul Explicit OBI targets Strategic partnerships Platform re-price Marketing and product innovation Grow

71 Momentum Life Johann le Roux

72 Momentum Life s key leadership themes Commercial ethos How we interrogate profitability Competitive culture How we compete/enable sales? Business outcomes How we deliver? Engagement culture How we engage?

73 Momentum Life Products What are some of our key features? Momentum Myriad Momentum Investo Momentum Traditional R5.8bn premiums R3.7bn premiums R1.5bn premiums R1.3tn sum assured R44.2bn AUM R31.5bn AUM 302k contracts 396k contracts 333k contracts 100 benefit types 90 products 1167 products R780m retirement booster benefits R660m in accrued loyalty bonuses

74 Momentum Myriad

75 Myriad philosophy Building block flexibility Accurate pricing MYRIAD Best of breed benefits Living product solution Transparency and Treating Customers Fairly

76 Momentum Myriad What are Myriad s key strategic focus areas? Products Processes Positioning Benefit innovation On-boarding Channel marketing New Metropolitan product Claims & service Product management Industry awareness

77 Momentum Myriad What is Myriad s pricing approach? Personal risk rating Momentum Interactive Multiply Premier R Income and education Health and lifestyle Wellness activities + fitness R

78 Momentum Myriad Interactive 2.0 Body Mass Index (10%, 7.5%, 5% ) 2.5% or 0%) Professional 2.5% Married 2.5% Regular debit order discount 5% Up to 20% Lifestyle 13.8% Average 6.2% Average Simplified risk rating factors More than DOUBLE the discounts* *Calculated on an average basis.

79 Momentum Myriad Myriad and Multiply rewards Healthy Heart Score Active Dayz TM or Fitness Assessment Bronze Silver Gold Platinum Private Club GREEN AMBER RED 16+ p.m. Or Level 5 20% 25% 30% 40% 60% 12+ p.m. Or Level 4 15% 20% 25% 30% 40% GREEN AMBER RED 8+ p.m. Or Level 3 10% 15% 20% 25% 30% 4+ p.m. Or Level 2 5% 10% 15% 20% 25% GREEN AMBER RED 0+ p.m. Or Level 1 5% 10% 15% 20% 25%

80 Momentum Investo and Traditional

81 Momentum Investo and Traditional What are our key strategic focus areas? Migration Products Processes International Metropolitan Life Investo enhancements Data quality Africa support Product management

82 Unrivalled client value Investo RA 40% 3.4% 35% 30% 25% 20% 15% 76% less than competitor average 26.8% 36.3% 3.2% 3.0% 2.8% 2.6% 14% less than competitor average 2.7% 2.7% 3.0% 3.3% 10% 2.4% 2.5% 5% 0% 4.7% 8.4% 6.9% A B C One year EAC D 2.2% 2.0% A B Maturity EAC C D Note: RA of R1 000 p.a. for 20 years, 10% annual escalation, internal balanced fund.

83 Combining Investo RA with Myriad 3.0% 2.5% 2.0% 1.5% Negative EAC 1.0% 0.5% 0.0% Scenario 1 Scenario 2-0.5% EAC without Retirement Booster Effective cost with Retirement Booster Scenario 1 RA of R1 000 p.m. and Scenario 2 R4 000 p.m. for 20 years, 10% annual escalation, internal balanced fund. Retirement Booster on R2 000 p.m. Myriad risk premium.

84 Service

85 Momentum Service Improvements in our loss call ratio 70% 60% 50% 40% 30% 20% 10% 0% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Myriad Investo Traditional

86 Digitisation

87 Momentum Digitisation What is our digital platform and capability landscape? CLIENTS Web Mobile Social/Chat Workspace Mobile API DIGITAL SELF SERVICE ENABLED SOLUTIONS SHARED CLIENT DATA AND CONTEXT PRODUCT SOLUTIONS PRACTICE SOLUTIONS DIGITAL PRACTICE ENABLED SOLUTIONS Engagement Sales Services CRM & Workflow Financial planning Insights

88 Financial Outcomes

89 Momentum Life financial outcomes What are our targeted key financial outcomes? 7% to 11% increase in core headline earnings 20% to 30% increase in new business margin Value Chain Optimisation Footprint growth Superior service Technology environment Client engagement Product innovation

90 Momentum Multiply Zureida Ebrahim

91 Multiply Zureida Ebrahim MMI Investor Conference 15 October 2018

92 Content 01 The WHY 02 Multiply 03 Transactional Banking

93 01 The WHY

94 To succeed, we need to reimagine the value we deliver as an insurer Solving client outcomes means getting involved in how they use our products Purchase & sale Safety Travel Home Safety Lifestyle Energy Purchase & sale Damage & repairs Accident, theft & repairs Lifestyle Insurer Diagnostics Retirement Treatment Financial planning Healthy living Health Life & Finances Healthy living Source: BAIN Ecosystems 2017

95 Multiply your life Be healthier Be safer Be on top of your finances Responsible for 71% of all deaths worldwide Diabetes Cardiovascular disease Alcohol abuse Unhealthy diets Cancer Chronic respiratory diseases Smoking Physical inactivity crime incidents were experienced during 2016/ people died on South African roads during 2017 At home On the roads 53% were housebreaking or burglary 91% of these were due to human error Only 13% of consumers pay off their credit cards each month Heavily indebted and 51% are in arrears Unable to deal with emergencies R financial shock The breaking point for more than 52% 40% Poor spending of South Africans of South Africans spent more than they earned in 2017 Source: World Health Organisation Non-communicable diseases fact sheet June 2018

96 02 Multiply

97 Rewarding you on your journey to success Clients want Outcomes, not just products Be healthier Be safer Be on top of your finances Healthy Heart Score Active Dayz TM Safety Score Safe Dayz TM Financial Wellness Score Track your money health and life car and home spend and save Help and incentives Discounts Momentum products and partners Stretch their rand now and in the future Save Breadcrumb savings Multiply Money Spend Use your money Trusted partner/ ongoing involvement KNOW TRACK IMPROVE

98 Rewarding you on your journey to success Momentum gets An integrated lifestyle management platform Be healthier Be safer Be on top of your finances Healthy Heart Score Active Dayz TM Safety Score Safe Dayz TM Financial Wellness Score Track your money health and life car and home spend and save Clients who get more, buy more, stay longer Discounts Momentum products and partners New revenue streams Become a trusted financial wellness partner Save Breadcrumb savings KNOW Multiply Money TRACK Spend Use your money IMPROVE

99 Rewarding you on your journey to success Be healthier Be safer Be on top of your finances Healthy Heart Score Active Dayz TM Safety Score Safe Dayz TM Financial Wellness Score Track your money Momentum gets An integrated lifestyle management platform health and life car and home spend and save Discounts Momentum products and partners Clients who get more, buy more, stay longer Save Breadcrumb savings KNOW Multiply Money TRACK Spend Use your money IMPROVE New revenue streams Become a trusted financial wellness partner

100 3 Multiply Options We have >1million Multiply members Multiply rewards you for making the right choices so that you can be healthier, safer and on top of your finances. Starter Provider Premier Free Middle market Upper market

101 Delivering VALUE

102 On average a Multiply client on Gold status saved more than R1000 per month

103 Last year, we filled Grocery trolleys Healthcare trolleys Spending in total Savings Spending in total Savings R538 million R25 million R271 million R15 million Cinemas Savings for Black 45 Panther alone! R3 million Spending in total R196 million 520 Mango airplanes Savings R50 million

104 had significantly fewer claims per person Multiply members claim 36% less with Momentum are 26% more likely to receive standard underwriting rates live 18 years longer than non-multiply members

105 experienced lower lapse rates Lapse rates Lapses per status Multiply overall 1 Non-Multiply Bronze Silver Gold Platinum Private Club

106 and now driving safer clients activated Safe Dayz TM 1,4 million Safe Dayz TM earned 80 million km of driving data gathered

107 Resetting CLIENT EXPERIENCE

108 Get the basics right Improve service levels Improve client experience and engagement Get the team engaged Transition from legacy systems to modern technology Moved service back into business Build on digital capabilities Multiply website and app Optimise new operating model Improve client experience Service promise for 2019 Improve communication with clients engage in a relevant way Establish agile way of work Save costs Improve implementation agility

109 Creating GROWTH

110 Targeting 35 40% growth to F2021 Increase IFA and Agency channel support and growth Establish specialist distribution relationships with product house partners Increased marketing and PR Establish a direct sales capability Reduce lapse rates by further 15% over three years

111 Expenses flat to F Management Expenses to 2021 (R'm) Migrate line of business system to modern technology platform Efficiency savings of R8 million p.a. in F2020 and F

112 Partner benefit expense ratio maintained at 75% - 80% 126% Historic & Targeted Expense Ratio 96% 82% 80% 78% 77% F-16 F-17 F-18 F-19 F-20 F-21

113 Growth and cost management key Key metrics (R'm) FY18 F21 Key Assumptions and Targets: Member growth of 35%-40% 15% improvement in lapse rates Partner benefit expense ratio to reduce to 75% - 80% Contained overhead and expense growth Premium Income Management Expenses Benefit Expenses

114 Reduction in funding requirement to ~R100m in F Post Product Fee Expense decline to 2021 (R'm) Expense Post Product Fee (2018) Contribution Margin & Fee Growth Manex Growth Overhead Growth Expense Post Product Fee (2021)

115 03 Transactional Banking

116 The WHY again Research shows that South Africans are struggling financially Heavily indebted Planned poorly for life events Wealth creation ONLY AND 13% of consumers pay off their credit cards each month 51% are in arrears ONLY 33% of South Africans are currently working with monthly budgets and expenses to keep their finances in check 8 out of 10 South Africans consider taking a second job to assist with monthly expenses and bills R10,000 financial shock Unable to deal with emergencies The breaking point for more than 40% of South Africans Poor spending 52% of South Africans spent more than they earned in 2017

117 In addition, lines are blurring There is a blurring of the lines between banks and insurers and the winners will be those that can regularly engage with their clients in order to retain, up-sell and cross-sell Increased competition Loss of funds Regular client interaction (big data) The focus has shifted to gaining and protecting share of client wallet. Simple integrated models increase client value and therefore loyalty Long-term savings within the asset management and insurance industries find their way back into banks in the form of shorter duration saving To retain clients it is important to "touch" clients on a regular basis. Mobile banking is a big enabler in retail banking. Banks are in a better position to interact with clients and therefore sell more products Sources UBS Research Report; South African Financials Blurring of the Lines 26 July 2017 postulates that the blurring of the lines" between banks and insurers is the key theme in determining winners and losers in SA financial services in the medium term.

118 An integrated model Simple, integrated models increase client value and therefore loyalty Generates new revenue streams from lazy balances Strengthens the various MMI brands through regular client engagement Creates demand for MMI products by triggering awareness and freeing up money Simplifies the reinvestment process by directing funds back into the MMI eco-system Provides access to new consumers and new data insight

119 In tough economic times, we do the things that really matter Enable people from all walks of life and businesses to achieve their financial goals and life aspirations Better manage their debts Prepare for emergencies Set money goals Grow your money Improve spending habits

120 Multiply MONEY

121 Multiply your money Be healthier Be safer Be on top of your finances Healthy Heart Score Active Dayz TM health and life Safety Score Safe Dayz TM car and home Financial Wellness Score Track your money spend and save Cashbacks and discounts product and partner Save Breadcrumb savings Multiply Money Spend Use your money KNOW TRACK IMPROVE To do the things you want, now and in the future

122 How Multiply Money works Get. Save. Spend.

123 Building great CLIENT EXPERIENCE and GROWTH

124 Building client experience 2019 Building the basics and confidence 2020 Building the balances 2021 Building a fan base Self Service applications and automating key processes and services Unlocking CRM capability Expand Personal Financial Management solution Open market proposition Product Integration Emerging Market Proposition

125 The Financials 800,000, ,000, ,000, ,000,000 Cumulative Profit over 10 years Sensitivities Change in Transactional Interest Rate Change in Savings Interest Rate Change in outflow of Savings Change in take up Change Card to Credit Card Change in Multiply Saving Accounts Outflows from Transactional Account - Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 (200,000,000) (400,000,000)

126 Thank you for today

127 Questions?

128 Peter Tshiguvho October 2018 Peter Tshiguvho October 2018 Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 128

129 CONTENTS: Strategic Context Reset Focus Areas Growth Focus Areas Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 129

130 STRATEGIC DIRECTION METROPOLITAN HELPS YOU ACHIEVE YOUR FINANCIAL LIFE GOALS. Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 130

131 Themes & Challenges in Market Economic Pressure on Clients Highly Competitive Market Generational Shift to Digital Solutions Changing Consumer Preferences Industry Regulatory Compliance Client Retention Market Strategies Digital Enablement Life Goal Enablement Advisor Retention Stakeholders Clients, Employees, Group Executives, MMI Board & Shareholders, Government, Regulators and Industry Bodies Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 131

132 Financial Overview Core headline earnings history F2021 Core headline earnings target R610m R670m 0% - 3% pa CAGR over 3 years F2014 F2015 F2016 F2017 F2018 Key drivers Assumes modest improvements in agent productivity Lapse rates in line with new assumptions Allows for significant investment into upgraded branch infrastructure Key risks Weak distribution performance could see VNB stuck at current levels Expenses outside of branch costs assumed to grow at below inflation New entrants into the market segment

133 Our Strategic Direction RESET Stabilise sales force Upgrade office footprint Migration GROW Adviser productivity Improved Client Value Proposition Sales & service efficiencies Market Access Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 133

134 RESET FOCUS Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 134

135 STABILISE THE SALES FORCE & ENABLE SALES GROWTH Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 135

136 Improving levers of profitability % 67.0% 67.1% 66,8% As at Jun 2016 As at Jun 2017 As at Jun 2018 As at Jul 2018 As at Aug 2018 Productivity Improvement As at Sep 2018 Average F2016 Average F2017 Average F2018 Average PCR Achieved Average F2019 Equipping the Channel: Manager Development: Market Access Strategy: Geo-mapping potential: Program and process changes to attract, recruit, onboard, train, vest and supervise advisers Branch Manager Accelerator Program to develop and retain managers Utilise MyMarkets tool to identify, plan, activate and track new business Utilise MyMarkets and geo-mapping tools to identify branch potential Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 136

137 Resetting and recalibrating branch categories Q1 F2018 Q1 F2019 Platinum Gold Silver Establishing & Support MANAGEMENT ACTIONS THAT RESULTED IN CHANGE Geo-locating branches to reach target client segments Consolidating under performing branches Recalibrating to higher performance standards Adviser vesting into markets and coaching advice, solutions and processes. Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 137

138 Adviser vesting: Market Access strategy Growth enabled through union and worksite activations, sponsored events and engagements Mode of payment Metropolitan Client Sub-Segment Focus 41.4% 58.6% 38.9% 61.1% 36.3% 63.7% 38.7% 61.3% Client Sub- Segment Market Opportunit y (millions) Market penetration (%) PCR Rate (%) F2016 Average F2017 Average F2018 Average F2019 Average Traditionalist % 57% Realist 1.2 3% 69% Bank Debit-Order Stop-Order Aspirer 5.1 7% 74% Pioneer 0.2 6% 81% Vocationalist % 83% Striver % 87% Sustainer 1.1 8% 89% Improved stop-order mix leads to: Improved persistency / Improved productivity / Stabilised sales force and adviser retention Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 138

139 UPGRADE OFFICE FOOTPRINT Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 139

140 Geo-locating / Points of presence Client Preferred access point for emerging market Adviser Most productive adviser (average 17 per month) Shareholder ROI measured in viability linked to branch category Physical points of presence are a competitive imperative (Old Mutual, Capitec, FNB) Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 140

141 Challenges experienced in the African Bank insurance partnership Locus in African Bank Locus in Metropolitan Mismatch in Metropolitan targeted client sub-segments and African Bank branch traffic, resulting in: High adviser churn in African Bank branches, resulting in: - Limited sales opportunities for experienced advisers causing these advisers to opt out of the opportunity - Low productivity and business volumes - Poor business quality for less experienced advisers causing significant remuneration impacts - Under-performance on targets set Reduced profitability and value-share for both parties Insurance partnership terminated October 2018 Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 141

142 GROWTH FOCUS Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 142

143 ENABLING GROWTH IN PRODUCTIVITY Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 143

144 Value chain of management Change leaders Branch Manager Accelerator High staff turnover of advisers linked to calibre of manager Closest proximity layer to the adviser Managers currently not well equipped to lead and activity manage Programme to build excellence in the branch manager layer Culture of execution accountability and consequences Growing smart managers MetHub and just-in-time analytics Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 144

145 Digital supervision supporting and growing better advisers OUR NEXT DIGITAL INNOVATION Digital supervision This digital tool will allow us to track and predict adviser behavioural patterns. Process automation is used to provide channel managers with the insights to personalize coaching and training per adviser. There are three key benefits of this process: From a compliance and governance perspective we can provide clear evidence of the supervision practices required in terms of FAIS regulation for less experienced advisers. Grow better channel managers and advisers by noticing, supplementing and suggesting interventions. Reducing cost Interventions triggered only where and when needed. Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 145

146 DIGITALISING FOR SALES AND SERVICE EFFICIENCIES Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 146

147 3 Intertwined capabilities Step1 KNOW Client insights capability: know our clients intimately and from a quantitative and qualitative perspective 1st place for third consecutive year Step 2 ACTION Embed client insights into all of our systems, process and client interactions across all channels Step 3 OUTCOME our clients experience us as intuitive, warm, empathetic, responsive, trustworthy, and relateable Understanding target market digital behaviour is imperative for our digitalisation approach Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 147

148 Omni-channel client engagement strategy Our new reality! Solutions designed and built once for reuse by all our sales channels Tech-savvy clients prefer digital self-help sales and service options Relationship with brand and CVP is stronger than with our sales channels Omni-channel efficiencies build once, use in all channels Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 148

149 Digitilisation approach Step1 KNOW Target market clients currently prefer human interactions for advice and purchase decisions and digital or telephonic channels for low-stakes transactions. Step 2 ACTION We use digitalisation to innovate and optimise making human interactions magnificent Step 3 OUTCOME A differentiating human : digital strategy Digitilisation is the use of digital technologies to change a business model and provide new revenue and value producing opportunities; it is the process of moving to a digital business Digitisation is the process of changing from analog to digital form. Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 149

150 MIGRATING TO NEW CLIENT VALUE PROPOSITION Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 150

151 Client Value Proposition components Our clients are individuals who have individual names, hopes, goals and aspirations Engagement Personalised Life Goal Advice Affordable products Premium management Life event management Hassle free claims 1% 86% Same Day 99% paid Our strategy must be able to evolve with and positively influence our client s choice of interaction, engagement, advice and ongoing service mediums in the emerging and middle markets Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 151

152 Financial Life Goals METROPOLITAN IS A HOLISTIC ENGAGEMENT, ADVICE AND SOLUTIONS BRAND we aim to be a one-stop-shop for a market where trust, ease of access and affordability are the primary considerations for Brand choice OUR SOLUTIONS RECIPE ENGAGEMENT ADVICE PRODUCTS DIGITAL INNOVATION AS DIFFERENTIATOR FLEXIBLE ADVICE PLATFORM PRODUCTS DECOMMODITISED DIGITAL INNOVATION Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 152

153 GROWTH THROUGH WORKSITE MARKETING (MARKET ACCESS) Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 153

154 MyMarkets Identifying & Planning Opening & Activation Track New Business Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 154

155 LOOKING FORWARD... Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 155

156 Core, adjacent and transformational focus areas Balancing business-of-today with the opportunities of our business-of-tomorrow Serve Existing Market and Clients Enter Adjacent Markets, Serve Adjacent Clients Create New Markets, Target New Client Needs Core Stabilise sales force Upgrade office footprint Migration Adviser productivity Improved Client Value Proposition Sales & service efficiencies Market Access Adjacent Youth Pioneer segment Digitilisation Diversified e.g. lending Growth from client upsell Transformational Accessing new markets e.g. informal clients Digital disruption e.g. client self help Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 156

157 QUESTIONS? Metropolitan is a division of MMI Group Limited, an authorised financial services provider page 157

158 MMI Investor Conference Aditya Birla Health 15 Oct

159 Agenda Aditya Birla Health 1 Overview of Aditya Birla Capital and Aditya Birla Group 2 India Health care market Trend & Opportunity 3 Our strategy and key differentiators 4 Our journey so far 5 Way Forward & Key Strategic initiatives Aditya Birla Health 159

160 India has huge potential due to huge scale Every 6th Person in the World is Indian Largest Democracy 3rd largest economy (PPP) Nominal GDP US$ 2.6tn to US$ 4.6tn by 2023 Largest Youth Population at 600 million User Base FY18 Growth 6.7% Forecast FY19 7.4% 1.2 bn* 330m 500m #1 #2 Aditya Birla Health *Mobile phone connections 160

161 India has huge potential due to vast diversity 120+ Languages 45% Middle class population 31% Urban 69% Rural 29 States 7 Union Territories 46 cities (>1m Population) 68 cities by Indians in Forbes richest 22% Below Poverty line 3rd largest tech start-up location 63% Working Class population 161

162 Aditya Birla Group Revenues ~ US$ 44bn 14 businesses across manufacturing and services Market cap US$ 50bn+ 50% overseas revenues Best employer in India as per AON - 3 rd time over the last 7 years 120,000+ employees ; 42 nationalities Aditya Birla Health 162

163 Information here Aditya Birla Capital Stock exchange Listing 1st September businesses Revenues ~ US$ 2bn Assets Managed US$ 46bn NBFC Housing Finance Broking Insurance Advisory Market Cap ~ US$ 4bn Customers > 10m Life Insurance AMC Health Insurance Private Equity Online Money Management Asset Reconstruction Best employer to work for 14,500+ employees PAN India presence 1600 touchpoints across 400+cities Wellness Pension Agents and Partners 190,000+ Aditya Birla Health 163

164 Agenda Aditya Birla Health 1 Overview of Aditya Birla Capital and Aditya Birla Group 2 India Health care market Trend & Opportunity 3 Our strategy and key differentiators 4 Our journey so far 5 Way Forward & Key Strategic initiatives Aditya Birla Health 164

165 India has highest % of out-of-pocket health care expenditure Mature Market (Health) Emerging Market (Health) Out of Pocket % US$bn GWP Govt spend % of GDP Out of Pocket % US$bn GWP Govt spend % of GDP USA 11% % Brazil 25% 10 9% Franc e 6% 42 12% China 31% 41 5% German y 13% 43 11% India 62% 5 1% Matur e 12% % Emergin g 34% 61 6% Source: Mckinsey Global insights 2017/ WHO Source: OECD Data High out-of-pocket expenditure coupled with lower public expenditure provides huge opportunity for Insurance in India Aditya Birla Health 165

166 India Health care to grow at 15%+ backed by strong fundamentals Health care expenditure (HCE) is expected to double by 2021 Key Demand Drivers US$ bn Increase in Population 1.35bn by % %+ 280 Increase in lifestyle diseases No of Diabetes patients to increase to 120m by Increase in medical tourism From US$ 3bn in 2015 to US$ 9bn by Source: IBEF E 2020F Conducive regulatory framework FDI, tax benefits & favourable govt. policies to propel health care Growth in Health care sector to propel health Insurance growth as currently ~7% of Pvt. Expenditure is funded by Insurance Aditya Birla Health Source: WHO Non-communicable Disease Profile 166

167 Health Insurance is expected to grow upward of 15% fueled by strong demographics Industry to touch ~ US$ 15bn GWP by 2025 Key Demand Drivers GWP US$ bn 17 Increase in Retail penetration Significant opportunity as currently <3% of the population covered (excl. Govt. / Group) 9 Expanding Middle class Middle class HH to increase from 70m in 2016 to 110m by Increase in access and health care infra Increase in hospitals beds from 1.5m 2015 to 2.5m by 2025 FY 18 FY 20E FY 25E Evolving models of Insurers SAHI, Focus on Tier III cities, New technologies and online distribution Source: GIC & IRDA for FY 18. Projection basis KPMG &Internal estimates Aditya Birla Health Source: WHO Non-communicable Disease Profile 167

168 Stand alone health insurance players have been growing faster than the industry consistently every year % Market Share FY18 YoY Growth 3 year CAGR Industry Total % 22% 23% 31 Players - 4 Public, 21 Private multi-line & 6 Standalone Public Sector 55.0% 12% 20% Public sector compete on pricing Private Multiline 25.0% 33% 21% Private multi-line have limited retail focus, especially smaller players Stand alone health insurance 20.0% 40% 41% Standalone latest entrants in market with high focus on product innovation Players Health Insurance has been growth at 2X of GDP growth rate and SAHI has been growing at 2X of Insurance growth Source: IRDA Segment wise report 168

169 Standalone health insurers have shown higher growth rates Growth Rate INR Cr 350% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% ABHI 243 Cigna TTK Apollo Munich Max Bupa Reliance Religare HDFC Ergo 1586 Bajaj Allianz ICICI Lombard 4145 Star Health National Oriental 5837 New India United India 0% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% Market Share While PSU players have higher market share due to vintage, Stand-alone health players have higher growth rate 7488 Aditya Birla Health Source: IRDA Segment wise report Stand Alone Health Insurer Private Insurers Public sector Insurance 169

170 White spaces continue to exist for ABHI to leverage Untapped Customer Segments < >50 years Scaling-up Opportunity Top 100 cities Next 500 cities Untapped Product Segment Hospital Pharma/Dr Wellness Chronic care Aditya Birla Health Industry presence Industry white space Sub- Optimal Operating Model Digital delivery Provider network Experience & Engagement Claims Management 170

171 ABH fits into both ABC s & MMI s vision ABHI formed a 51:49 joint venture between ABC and MMI Aditya Birla Health Insurance Aditya Birla Wellness MMI Expertise on managing health of customers through their chronic care program and incentivizing them on their health would help ABH fill key industry white spaces Aditya Birla Health 171

172 Agenda Aditya Birla Health 1 Overview of Aditya Birla Capital and Aditya Birla Group 2 India Health care market Trend & Opportunity 3 Our strategy and key differentiators 4 Our journey so far 5 Way Forward & Key Strategic initiatives Aditya Birla Health 172

173 Our Purpose and Key differentiators WHY Purpose : Empowering and motivating families to prioritize their health and live fulfilling lives WHAT Differentiators HOW Initiatives Wellness targeted at <35 years Chronic care targeted at >50 years Expand market through CVP Through a differentiated Product suite Right Customer & Product Mapping Optimal Distribution Scale- Ideal for Top 3 players Engagement - Move from Buy & Forget to Buy & Engage Superior Financial Management Multi Distribution strategy to increase our geographical spread Deepening of Banca tie-ups Industry 1st Phygital strategy to reach all customers Incentivised Wellness - Active Dayz/ Health Score Experience -Care Managers / NPS, Digital Health Care Ecosystem & APP Healthier Customers lead to lower claims Engaged Customers lead to higher retention Aditya Birla Health 173

174 Expand the market with CVP Optimal Distribution scale Move to Buy & Engage Superior Financial Management Our Product innovation Industry 1 st in many cases Low cost plans for indemnity and incentivised wellness for certain segments India s first wellness & rewards program with Free access to gyms and life style rewards* Multiply Health cover across all segments Product Suite Incentivised Wellness Day 1 Chronic Care Earn 30% of Annual premium based on active days through gym visits, wearables Day 1 cover for cost of medicine, diagnostics and consultation Highest no of CI. + Lowest survival period & Cancer care plan Critical illness/ Cancer care Modular offering Choice of room rent, Incentive for utilising lower category room Aditya Birla Health * Offered by Aditya Birla Wellness Co. Ltd 174

175 Expand the market with CVP Optimal Distribution scale Move to Buy & Engage Superior Financial Management Access - Our Multi-Distribution Strategy 1/2 Agency Banca Broker Digital Presence in 41 Cities with 59 Branches Tie- up with 100+ Brokers & Corporate Agents Online Lead Generation Advisors as on June 18 Presence in 50+ cities Partnership with Policy bazaar & key aggregators 500+ Sales Managers 50 Tele-callers & 35 direct sales manager ABHI has strong multi-distribution capabilities with flexibility to scale up Agency channel going forward Aditya Birla Health 175

176 Piramal Enterprises Limited Investor Presentation Wide Distribution Network Expand the market with CVP Access - Growing distribution network across channels 2/2 Optimal Distribution scale Move to Buy & Engage Superior Financial Management Q1 FY18 Q4 FY18 Q1 FY Agents , ,600+ Active POS (Banks) No. of Cities Hospital network 1,910 4,200 4,580 Aditya Birla Health Agency Branch Network Sales Force 500 1,110 1,

177 Expand the market with CVP Optimal Distribution scale These 5 initiatives will drive engagement & lead to superior customer experience Move to Buy & Engage Superior Financial Management Phygital - Physical + Digital Delivery Creating Platform for Health Ecosystem via partnership Engagement - Move from Buy & Forget to Buy & Engage NPS covering ~80% of critical customer journeys Increase customer engagement through self-servicing, and focus on health outcomes Health risk management and chronic care management initiatives Aditya Birla Health 177

178 Expand the market with CVP Value creation through Superior Financial Management Optimal Distribution scale Move to Buy & Engage Superior Financial Management Value Distribution scale Engaged customers (higher persistency) Better health outcomes (lower claims) Cost efficiencies Key Levers Accelerated growth - GWP ABHI Growth to be higher than Industry growth é Renewal book (Renewal % of Total GWP) Digital Engagement / Servicing Sustained Customer NPS at all stage at > 40% Better claims mgmt. - Retail claims ratio Target -35% customers on health journey Health risk management through health data Sustainable Profitability - through efficient expense and combined ratios Aditya Birla Health 178

179 Agenda Aditya Birla Health 1 Overview of Aditya Birla Capital and Aditya Birla Group 2 India Health care market Trend & Opportunity 3 Our strategy and key differentiators 4 Our journey so far 5 Way Forward & Key Strategic initiatives Aditya Birla Health 179

180 24 months back ABHI initiated its journey to transform health insurance perception in India Robust Revenue growth In a short span of 12 months, ABHI covered 1m+ customers Distribution & Product journey Comprehensive product suite with product launched for all customer segments All channels activated within 3 months of launch Customer engagement experience One of the youngest customer base in the Industry Strength of our business model has been validated by the company s performance Aditya Birla Health 180

181 Our Journey So Far- Revenue 1/3 Total GWP (Rs m) - Full Year Total GWP (Rs m) - Q1 Retail Mix 6% 34 % 2,431 FY FY Retail Mix 6% % 756 FY17-18 FY FY (April-March) Retail GWP (Rs m) - Full Year Q1(April-Jun) Retail Retail GWP GWP (Rs m) (INR- Mn)- Q1 Q X FY (April-March) Q1(April-Jun) Focus on Retail segment to drive profitability & create strong customer franchisee for long term Aditya Birla Health 181

182 Our Journey So Far- Revenue 2/3 Total No. of Policies Full Year Total No. of Policies Q1 79,854 FY FY ,467 FY17-18 FY , FY (April-March) Q1(April-Jun) No. of Lives (Inforce) In million Full Year No. of Lives (Inforce) In million Q FY(April-March) Q1(April-Jun) Covering 1.1 Mn lives by putting Health in Health Insurance Aditya Birla Health 182

183 Our Progress till date- Revenue 3/3 Channel Mix As of December 31, % 15% 27% 50% Agency Banca Others 37% 23% FY17-18 Q1 FY18-19 Capacities created in Banca delivering growth with more than 50% contribution from Banca Aditya Birla Health 183

184 To Summarize, Differentiated Business model with Focus on health first before insurance We are doing well in initial years compared to key peers in the industry, but we aspire to be the leader Revenue growth will continue to be higher than market Continue to build new capacities and leverage the existing to its full potential Keep strengthening our health ecosystem for better customer engagement Focus will remain on value creation for long term Aditya Birla Health 184

185 Awards & Recognition Leadership Recognition Rising Star of the Year at the 2nd Annual India Insurance Summit & Awards 2017 Best Health Insurance Company of the Year Brand Recognition Won silver for best crowd sourced content at 2 nd E4M Content Marketing Award 2017 Paul Writer recognition of ABHI as Hot 50 Brands Product Recognition Won the 9 th edition of FICCI Healthcare Awards 2017 Awarded New Insurance Product of the year by World Health and Wellness Congress for Activ Health Aditya Birla Health Customer Service Recognition Care Manager Service was awarded under Star Performer Outreach category by ASSOCHAM India 185

186 Questions?

187 MMI Holdings Investor Conference Guardrisk Lourens Botha 15 October 2018

188 Agenda Who we are Investing for past and future Growth Landscape Changes

189 Who we are To be the trusted insurance partner to our clients for sustainable growth and financial stability

190 High level Overview Market Share (GWP Total) R20 billion Market share > 60% (Guardrisk Insurance) Cell Shareholders funds of R7 billion Over past 25 years paid back dividends in excess of R8.5 billion to our clients

191 Historical Glance 7% Growth 11% 17% 16% Revenue Type F % 0% 14% 8% 22% 72% F2016 F2017 F2018 Net Revenue Normalised Earnings Management Fee Investment Income Underwriting Profit Other

192 Historical Glance (Own Risk) Net Written Premium growth R' millionm F2014 F2015 F2016 F2017 F2018 Guardrisk Insurance Guardrisk Life

193 Investing for past and future growth

194 Strengthening the Foundation Market realignment Capacity catch-up Fixing loss making schemes / products Embracing regulatory certainty

195 Investing for Growth Growing our own Non-Life Growth Strategies Increase in front-end client engaging and new business staff Increase in broker footprint Aggregated Commercial Offering Mining Rehabilitation Life Growth Strategies Focused segments strategy with specific new business targets

196 Investing for Growth New Initiatives Transformation and Micro-Insurance Digital / Insuretech Guardrisk General Insurance Gradual and targeted increased risk taking with modest retentions; Specialize in- and segment along Niche Corporate, Commercial and Specialist lines; Use of prudent reinsurance structures, with high market security in order to limit volatility in earnings; Existing premium base allows for focus on profitable growth rather than the philosophy of writing for top line and fees; Increased focus on enhancement of claims management process and procurement efficiencies to sustain and strengthen margins in expanded underwriting environment;

197 What are we aiming for? CAGR Earnings > 10% Increasing Underwriting Profit 25% to 30% Substantial Increase in value

198 Landscape challenges

199 Landscape Changes Navigating SAM and Standard Formula Competitor Environment Potential increased earnings volatility

200 Questions?

201 MMI Holdings Investor Conference Momentum Short Term Insurance Brand Pretorius 15 October 2018

202 Agenda Part 1 Where have we come from? Part 2 Where are we now? Part 3 Our plans going forward

203 Where have we come from?

204 Momentum Short-term Insurance (MSTI) A brief history lesson Mandate September 2005 Started as JV between OUTsurance & Momentum July 2012 MSTI becomes wholly owned subsidiary of MMI Rebuild MSTI (specifically back office) in MMI Establish retail STI centre of excellence (back office) Provide (where appropriate) back office support to STI entities (over and above MSTI)

205 Momentum Short-term Insurance (MSTI) What challenges did we encounter? Growth from the non-profitable sources Lack of focus too many initiatives at the same time Limited management bandwidth and unclear accountabilities in operating model Core capabilities required for profitable growth (and excellence) not yet established, immature or not under control of management

206 Momentum Short-term Insurance (MSTI) How did we Reset the business Reset: Phase 1 (F2015, F2016) Reset: Phase 2 (F2017, F2018) Reduce new business volumes from high loss ratio sources Establish clear full value-chain (profitability) accountability Focus business and prioritise personal-lines market segment Significant focus on reducing the claims ratio Drastically reduce support to African countries focus on SA only Stabilise systems Regain management control of marketing, distribution & digital capabilities Fix service challenges Invest in profit-making capabilities pricing & underwriting critical

207 Momentum Short-term Insurance Reset Grow Full value chain responsibility Grow client base SA focus only Improve claims ratio Streamline processes Exit car dealerships Enhance pricing and underwriting capability

208 Where are we now and what progress has been achieved?

209 What are we aiming for? Definition of success Transform MSTI into a sustainably profitable business in the next 3 years Financial aspirations 1 MSTI (license only) profitable on a before tax basis in F Consolidated MSTI (license and full back office) profitable on a before tax basis by F Achieve >20% premium growth per annum for the period

210 How are we doing? Reset New business volumes New business volumes Productive Face-to-Face advisors ,8% 28,4% 30,000 20,000 F2018 F ,000 F2016 Sold API R m - 0 F2016 F2017 F2018 Sold API - Direct Sold API - IFA Sold API - Momentum Financial Planning Gross nr of sales Nr of sales F Ave no. of productive advisors per month

211 How are we doing? Reset Growing the client base Inforce clients 11,2% F2015 F2016 F2017 F2018

212 How are we doing? Reset Managing unprofitable lead sources Exit the car dealership channel Sales Inforce policies F2015 F2016 F2017 F Gross nr of sales Inforce policies at end of period

213 How are we doing? Reset Reducing the claims ratio Claims ratio by financial year 100% 80% 60% 40% 87% 82% 73% 67% 20% 0% F2015 F2016 F2017 F2018 Medium term target 140% 120% 100% 80% 60% 40% 20% 0% New business claims ratio Monthly Annualised

214 How are we doing? Reset Addressing service challenges 95% 90% 85% 80% 75% 70% Customer Satisfaction Index F2015 F2016 F2017 F2018 Complaints % 0.50% 0.00% Ombudsman for STI complaints 40% 20% 0% Complaints as % of total claims Overturn rate Overturn rate

215 How are we doing? Reset Profitability Before tax profitability improvement F2016 F2017 F2018 Consolidated (license & full back office) MSTI (license only)

216 Our plans going forward

217 Grow 3 year success indicators Grow client base Achieve profitability > inforce clients MSTI (license) profitable (before tax) by F2019 > 20% YoY Premium income growth MSTI (consolidated) profitable (before tax) by F2021 New business 14% Ave premium values 9% Lapse rate <2% Claims ratio between 61% - 63% Management expense ratio <26% R1,35 billion in written premium by F2021

218 Grow Growing the client base Improve and expand our Safety value proposition 20% 35,100 active users 10 million journeys 15% 10% 5% 0% 145 million kilometers & 3,2 million hours of driving data 2,2 million Safe Dayz awarded Proportion of MSTI Policies with Multiply

219 Grow Growing the client base Improve and expand our Safety value proposition Increase the number of supporting planners and independent brokers Introduce online quoting capability Make more Momentum clients MSTI clients

220 Grow Achieve profitability Reduce the claims ratio Improve client retention and product-holding Streamline processes and improve efficiencies (automate and digitalise)

221 Thank you

222 MMI Holdings Investor Conference Momentum Corporate Thinus Alsworth-Elvey 15 October 2018

223 Agenda 1 Operating environment 2 Strategy and purpose 3 Financial update and key drivers 4 Q & A session

224 Operating environment

225 Operating environment Corporate market growth drivers continue to deteriorate World Bank cuts SA GDP growth from 1.4% to 1.0% High unemployment rates constraining domestic growth Mounting global trade risks Weakening demand for sub-saharan African products AND PUSHING UP POTENTIAL FOR DISABILITY CLAIMS * In line with the above analysis, FundsAtWork has seen average scheme sizes decreasing by 6% since F2015 and average contribution rates reducing

226 Operating environment Legislation and industry developments that can impact the market NHI and Social Security reform >3 year time horizon Increasingly populist prior to 2019 elections A need to balance with fiscal budget constraints Digital disruption Driving efficiencies, improved client engagement and data analytics Changing the future way of work and employment practices Driving new business models Incumbent and new competitors Existing competitors and brokerages operating more of the value chain Non-traditional players like mobile network operators launching life insurance products Default regulations Implementation 01 March 2019 Opportunity to retain clients at retirement / resignation Link to RDR

227 Strategy and purpose

228 Why Momentum Corporate? Here for you on your journey to success Well-diversified distribution team Significant product market shares Focus on superior client experience Strong and experienced leadership team Innovation Most comprehensive suite of products Trusted and respected brand

229 Why Momentum Corporate Here for your journey towards success By moving employees towards financial and physical wellness, Momentum helps businesses improve employee productivity to enhance employer financial performance and growth on their journey to success Engagement Solutions Service Such as disease management Client journey starts here Designthinking approach into employer and employee needs and specific goals Show value Offer relevant solutions from the holistic set that meets client needs and priorities and leverage solutions with rewards

230 Purpose and strategic focus areas Momentum Corporate By moving employees towards Financial Wellness, Momentum helps businesses to improve employee productivity, enhance financial performance and grow Uncompromising quest for client service Client engagement strategy including digital client journeys Back-to-basics operational focus enabled through technology Adequately trained and equipped staff with a culture of client excellence Product excellence and innovation Default regulation opportunities Value-add vs pricing play Solutions tailored to client segment needs New business growth and client retention Ownership of client through retailisation and direct strategy Segment-specific trusted value experts and brand loyalty Key client management Future-proofing the business Digitalisation initiatives Data gathering and client analytics Innovation and design thinking approach

231 Purpose and strategic focus areas Health To deliver Health - both in quality and quantity in relevant (sustainably profitable) segments, through an integrated outcomes-based health value proposition Clients Client engagement and digitization through hyper-personalisation, proactive engagement and client service excellence Business diversification Relevant value chain integration to better client experience and improve quality and quantity of health delivery MORE HEALTH FOR LESS Growth A relentless focus on growth across all lines of business through organic and relevant acquisitive opportunities Growth through BEE partners South African health membership Principle Members Public Sector Mining Corporate Open schemes Metropolitan Health 49% owned by Workerslife/Validate and Thebe Health consortium Thebe Health owns 48% of a merged entity called Momentum Thebe Ya Bophelo which focuses on the mining sector

232 Leadership team Experienced Momentum Corporate leadership team Average: 21 years relevant financial services experience Thinus Alsworth-Elvey CEO 22 years Steven Matthews Distribution 20 years Nomha Kumalo OLPS 19 years Regard Budler Product Solutions 10 years Rigitte van Zyl CVP 10 years Karen de Villiers Business Transformation 39 years Suleiman Tootla CFO 14 years Vasie Naicker Chief Risk Officer 22 years Hilda Martins Integrated Operation 34 years Ian Smith Customised Operations 26 years Elmarie Coetzee Human Capital 20 years Buli Mbha Chief Marketing Officer 3 years

233 Leadership team Experienced Momentum Health leadership team Average: 21 years relevant financial services experience Hannes Viljoen CEO 28 years Elsa Taylor CFO 25 years Patrick Furniss Operations 28 years Damian McHugh Marketing & Growth 26 years Michael Temlett Momentum 22 years Craig Comrie Corporate 17 years Mangaliso Mahlaba Mining 18 years George Botha International 17 years Ali Hamdulay Public 19 years Norman Swart IT 25 years Sivuyile Tshelu Risk 9 years Adele van Wyk Human Capital 26 years Nomo Khumalo Solutions 13 years Jeremy Williams Strategic programme office 32 years Mike Neubert Strategic landscape & industry 18 years Mark Mawman Alternative fields & wellness 18 years

234 Financial update and key drivers

235 Momentum Corporate

236 Financial results Momentum Corporate and Health (R m) Core headline earnings 13.1% CAGR 579 F2014 F2015 F2016 F2017 F2018 Momentum Corporate Health Guardrisk (R m) VNB Reset: Momentum Corporate Full value chain responsibility Strengthen leadership team and culture Rebuild distribution Improve underwriting experience 0 F2014 F2015 F2016 F2017 F2018

237 Financial targets Momentum Corporate and Health Growth: Momentum Corporate (R m) Core headline earnings % CAGR Normalisation of underwriting results Strong growth in new business flows 200 Managing expenses and improving efficiencies 0 F2014 F2015 F2016 F2017 F2018 Momentum Corporate Health Guardrisk F2021 Focus on quality and mix of new business (R m) VNB Key risks: Momentum Corporate % CAGR Inherent volatility of new business flows Commoditisation of pricing 0 F2014 F2015 F2016 F2017 F2018 F2021 Prolonged weak investment markets

238 Normalisation of underwriting results Margin focus rather than a volume play Disciplined and scientific approach to pricing Margin gap closed through repricing or terminating contracts* Sector and client specific exposure focus Direct strategy should improve persistency (active book 1.6x) Leading market share in disability, critical illness and funeral benefits * Since F2017, termination of loss-making contracts has reduced annualised losses by R87m p.a.

239 Target strong growth in new business flows A well diversified distribution capability across distribution channels Retailisation Direct strategy FundsAtWork Sign up employees through onsite, digital and telephonic engagement initiatives Increase direct share of new business to >50% Standalone conversion (600* funds; members & R145bn in AUM Penetrate large corporate Organised labour & public sector Investments Support our brokers Targeting 206 entities with employees Innovative products Investment performance Default regulations Direct servicing model for Momentum Retail brokers *Opportunity defined as standalone funds with fund sizes between R25m and R1bn

240 Unpacking the growth opportunity Organised Labour and Public Sector targeted opportunity set 206 public sector entities with employees translating into 30% 20% R3.6bn in group insurance 10% 0% R3.6bn in group insurance R2.4bn* in medical aid employer contributions Momentum Corporate Organised Labour and Public Sector current market share of target market 27% 12% 1% 2% R15.7bn in retirement employer contributions Unlocked through: R563bn in liquid investments and liabilities** Building trust and relationship management Client experience and service lives under administration Valued expert and brand loyalty Momentum Corporate analysis includes state owned entities, universities and municipalities * Full industry opportunity is R31bn in medical aid employer contributions taking into account Health business ** Liabilities are mainly comprised of defined benefit liabilities, post-retirement medical benefits, land rehabilitation liabilities

241 Key risk of inherent volatility of new business flows Mitigated by a well diversified distribution capability Covered new business premiums F2018 (API) 21% 21% 24% 4% 13% 23% 7% 35% Corporate Health (members) 52% By channel Specialised brokers MDS & MFP Customised brokers MC&A and direct Health specialists By segment Covered new business premiums F2018 (API) 7% 26% 34% 33% Covered new business premiums F2018 (APE) 7% 24% 69% Small Medium Large Organised labour & public sector By product Group Insurance Savings / Investments Annuities

242 Significant Employee Benefits market participant Showing the strength of our products 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 26% 18% Momentum Corporate market share 28% 21% 16% 9% Premiums Members Assets Members Assets Smooth bonus (assets) 23% Annuities (Group annuity payments) 6% Open scheme members 49% Restricted scheme members Group Insurance Administration (standalone) FundsAtWork Structured Investments Health Most comprehensive range of products for full value integration and customisation Solid and reliable business with sizeable and/or leading product market shares

243 Translating into a diversified earnings base Enhances stability of earnings profile Health - Public FundsAtWork Health - Private Other Investments Annuities F2018 core headline earnings R579m * Group Insurance excluding FundsAtWork

244 Our clients are at the centre of everything we do We are on a quest to make doing business with us a pleasure Employer s Brokers Focus on our processes and systems Client analytics to understand our clients better Well trained and equipped staff Employees Calls Lost call rate 0.1 Ave wrap time 1.2 Calls 8.7 Client Interaction mlistens s 8.6 s Ave TAT 24hrs Number in Queue 47 Service dashboard Claims 8.1 Average client ratings, indicating quality of interaction In SLA Average Productivity 75% Queue Management Productivity (P4P) Out of SLA Work items in team and staff queues Average productivity rating and trend line Culture and reward system aligned around serving our clients Operating structure that supports the unique needs of our broker channels Translating into a tangible dashboards to monitor service levels and react where needed

245 Client engagement strategy Digital client journeys form a key part of making it easy for our clients to do business Retailisation opportunities Engagement opportunities Smart Exits Preservation Smart Underwriting Underwriting profiles Smart Retirement Annuities Smart Onboarding Member engagement Multiply for Corporate Member behaviour Improved decisions First in South Africa Try-before-you-buy Brand equity Corporate engagement Gold Loeries Silver Loeries Knowledge tool Education Cross-selling All enabled with our Counselling team

246 Health business

247 Financial results Health business Reset Systems consolidation Public sector value proposition BEE transactions Low cost solutions growth Momentum Health open scheme growth 90, % 170, , , , , % CAGR 70,000 50,000 30,000 F2017 F2018 Successful conversion of OcsaCare members to Health4Me and organic growth 120,000 F2016 F2017 F2018 Health4Me membership OcsaCare membership

248 Financial targets Health business Growth (R m) Core headline earnings 6-10% CAGR Public sector Focused distribution especially Momentum Health Low income health Key risks F2014 F2015 F2016 F2017 F2018 F2021 Assumes the retention of GEMS Consumers under pressure

249 Health industry snapshot and dynamics Market opportunity, consolidation and value chain integration (R m) 100,000 80,000 60,000 SA industry total healthcare spend R162bn Estimated South African healthcare spend growing at >CPI+3% p.a. 40,000 20,000 0 Private open market Private employer licence Mining Public >R3bn Estimated South African healthcare earnings potential Regulatory impacts Consolidation in the industry Dominance of market players 15m Number of consumers growing at 1% per annum Cost inflation and affordability

250 Key growth drivers Health business Public Sector Target public sector employees currently uncovered Improve awareness of free cover Leverage BEE partnerships for further growth Low income health Target substantial market opportunities at current and new employer groups Focus on specialised channels for brokers and agents Focused distribution Dedicated service support for Momentum Health and Corporate schemes scheme Specialised support for retail and group channels Solutions and capabilities build Identify relevant M&A and amalgamation opportunities scheme Opportunities around primary, secondary and tertiary healthcare provision

251 Conclusion Comprehensive products BEE partners in appropriate markets Diversified distribution channels Experienced leadership team Growing digital capabilities

252 Product Supplier of the Year: Medical Schemes FundsAtWork umbrella fund Fund Challenge award Silver Award: Service Design Category 2018 Gold Award: Service Design Category 2017 Questions?