BBBEE record: Metropolitan/Momentum merger

Insurance giant MMI Holdings (MMI) reports that it has achieved the second highest possible ranking – Level 2 – on the broad-based black economic empowerment (BBBEE) scale. This was achieved while the group was bedding down a mega merger which brought together Momentum and Metropolitan operations to create MMI.

Following the 2010 merger, MMI is now positioned as the third largest life insurer in South Africa with embedded value estimated at more than R30bn. Positioned after giants Sanlam and Liberty Life, MMI has earned a high profile corporate identity and as such its BBBEE record will be watched closely.

When the 2010 merger took place there were fears that it was going to disturb transformation rhythms, more so from the view of the Metropolitan empowerment record. Metropolitan Life came into the merger with a legacy of being one of the first movers into the empowerment journey.

Metropolitan Life was bundled out of Sanlam in the 1990’s when the first wave of BEE took off. The operation was injected into a new BEE styled investment entity Metlife which evolved to become the New Africa Investments Limited (NAIL) and under the guidance of BEE pioneers. These pioneers included individuals like Nthato Motlana and Dikgang Moseneke. Sanlam’s gesture was rich. Once considered as the bastion of Afrikanerdom, Sanlam through that Metropolitan gesture and other initiatives was now flatting with the emerging black elite. Many things have happened since that 1993 Metropolitan/Metlife transaction but Metropolitan has lived with an image of being a relatively BEE friendly operation. When the 2010 merger with Momentum took place; Metropolitan came with a high profiled BEE partners including Kagiso Trust Investment which has evolved into Kagiso Tiso Holdings (KTI). This may explain why KTH is cited as a critical player in MMI transformation record of 2012.

The MMI statement said the group met its ownership target through its partnership with KTH and other empowerment shareholdings. Black ownership was quoted at 30.88% in the 2012 BBBEE scorecard.

MMI said it met its targets in enterprise development and corporate social investment. It attained an employment equity score of 8.9 out of 15 points against the backdrop of the revised targets set by the DTI in 2012. Together with other elements this left the group with a level 2 BBBEE rating.

“I am pleased that MMI continues to demonstrate strong progress in delivering on the promise of the merger. After the healthy set of interim results we posted last month, our level 2 contributor status evidences MMI’s commitment to transformation, which is one of our strategic focus areas,” commented Group CEO, Nicolaas Kruger.

Referring to the process of bedding down the two years old merger Dan Moyane, Group Corporate Affairs Executive, said “It was a challenging time for the group as business was focused on integration. Despite this integration, transformation remained a priority.”

Moyane added that “Some of the factors that impacted our B-BBEE performance can be attributed to the merger, which necessitated some redeployment and migration of staff. Our skills development programmes are focused on identifying talent within MMI to improve our representation systematically over time”.

“We scored 15.9 against a preferential procurement target of 20 points. We are actively engaging with our businesses to build on this solid platform going forward,” said Moyane.

The group said with the gazetting of the Financial Sector Charter (FSC) in November 2012, MMI is set to measure its future performance against the FSC scorecard, which will also include targets for access to financial services and empowerment financing. MMI believes that these are important pillars in transformation as the financial services industry is expected to make a meaningful difference in ensuring the majority of our population can participate in the economy and in making use of the savings of our consumers to build a sustainable future for our nation.

“‘The sustainability of our business depends on equitable socio-economic development and equal opportunities for all South Africans. The B-BBEE codes and the FSC are frameworks by which we can achieve this, and MMI will continue to work hard to meet and exceed the targets they set for the benefit of our business and of our country,” concluded Moyane.

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