Morning, everyone. Good morning, everyone. Yes, that sounds more like, like the people I know are energetic in early morning. My name is Dan Moyane. Welcome to this presentation of the interim financial results of Momentum Metropolitan Holdings for the period ending December 31, 2023. Now, we are making this live presentation today from the company's head office in Centurion, here in Tshwane. It's a very fitting venue to announce a robust half-year performance from the office of the Group Chief Executive Officer, Jeanette Marais. This is her office. Now, this heralds the beginning of a new and exciting chapter as Jeanette seeks to drive the group with purpose.
Now, welcome to everybody who's joining us here today in this office space, but also we welcome our analysts, the investors, shareholders, journalists, and of course the employees of the company, some of whom are here and others will be watching us live on BDTV channel 412 on DStv. We're also live from now on the webcast via Corpcam.com/m27032024, which is today's date. Now, the full results are also available on the group's website. That's momentummetropolitan.co.za. We wish to thank the Momentum Metropolitan Investor Relations team for putting together this presentation today, as well as the Momentum Metropolitan Group Marketing's PR and Events team for a job well done. Now, our gratitude today also is largely due to the strong half-year results that have been achieved despite the impact of a stagnant economy.
Now, operationally, the group is on track, as you will hear, to achieve the objectives set out in the three-year Reinvent and Grow strategy by the end of this financial year. As you'll hear shortly from Jeanette and from the Group Finance Director, Risto Ketola, most of the divisions of the group have made strong positive contributions that have led the group to achieve strong sales growth, posted solid operating profit growth, and realized as well a double-digit increase in earnings during the period under review. There will be time for question and answer on the platform itself, Corpcam, and later on after the presentations are finished we'll address some of them.
But of course, as usual, Jeanette and Risto and the team, the executive team, will be addressing some of the technical issues with investors directly, over the next few days, over the next few weeks, as well as media, of course, from today. So it's a busy day ahead. Let me not waste too much time. Let's put our hands together for our Group CEO, Jeanette Marais.
Good morning, everybody. And welcome to our shareholders, our analysts, the media, our employees, advisors, and friends. It's great to welcome you to, as Dan have said, to our head office in Centurion, from where we are doing our broadcast of our interim financial results for the six months that ended December 2023. Dan, just one small correction: this is Risto's office. In my part of the presentation, I will firstly discuss some key takeouts from the results, and then I will recap our Reinvent and Grow strategic objectives and indicate where we've made significant progress over the last six months. Our normalized headline earnings increased by 42% to ZAR 2.4 billion for the first six months of the 2024 financial year. These results are our first under the new accounting standard for insurance contracts, IFRS 17.
You will hear a lot about IFRS 17 over the next while. We have restated our results for the first half of FY2023 to IFRS 17. The majority of our businesses contributed positively to our earnings, including Metropolitan Life and Momentum Insure, that were lagging in the last set of results. Risto will unpack the earnings numbers in a lot more detail per business unit. The group's sales volumes increased by 18% to ZAR 39.1 billion. This is an all-time record for sales volumes in any half-year in our history. Remember, records are meant to be broken, so watch this space. We're very happy with the result given the economic downturn and the current economic environment. Unfortunately, while our earnings have improved, we are concerned about this downward trend in the value of new business, a decline of 38% from prior period.
In spite of the increase in our sales volumes, the high cost of acquiring new business placed our new business margin under pressure. We are giving significant attention to new business pricing, improving the sales mix, and the cost of acquisition. This negative trend applied to all business units except Momentum Investments, which really lifted the group's average through strong annuity sales with high margins, and the Momentum Wealth platform also had record sales, albeit at much smaller margins. Although we're now calculating VNB on a slightly more prudent basis than in the prior period, specifically for Metropolitan Life, it doesn't change the fact that new business margins are not at desired levels. I'd like to use the opportunity to zoom in on three of our businesses: Momentum Investments, not just because it was my previous baby, but because they had a remarkable performance over the last six months.
Then I'd like to give you an update on the turnaround plans for Momentum Insure and Metropolitan Life. In Momentum Investments, annuity sales have been nothing short of spectacular, with volumes increasing by another 55% year-on-year. This is from an already record-breaking base in FY2023. Normalized headline earnings increased by a solid 15% on the back of great previous earnings, and value of new business increased by an exceptional 83%. I think the investments team can be really, really proud of themselves. Not just that. Our annuity numbers have cemented Momentum Investments as a market leader in annuity sales in the independent financial advisor market now. Most recent market share information indicates that our local flows, which include local platform and annuities, for the Q1 in 2023 have had the highest net flow market share.
Up to December 2023, Momentum Wealth International's net flows were the highest in the market. Over the last few years, Momentum Investments and Momentum Corporate started collaborating to optimize our joint proposition and to ensure better outcomes for our clients with great success. And then lastly, RMI Investment Managers' transaction has received Competition Commission approval, and the deal is in the last days of conclusion. I think if Risto wasn't so busy today, he would probably have been busy signing that check today. Momentum Insure's turnaround plan is also on track. In this set of results, they show a small profit for the first time since the 2022 financial year, with their normalized headline earnings improving from a loss of ZAR 70 million to a profit, a small profit of ZAR 31 million.
Earnings benefited from strong investment returns, and the higher reinsurance attachment point negatively impacted earnings by about ZAR 20 million. They maintained their targeted policy, solvency policy cover ratio between 1.4-1.6 times. On our current forecasts, we don't foresee any further capital injections into this business. The corrective actions Momentum Insure started taking are also showing positive results. They show a material impact, improvement in the claims ratio despite two significant weather events during this period. If we exclude these extreme weather events, our claims ratio at 66.4% is where we wanted to be for 2020 within our 2014 target range of 67%-69%. It's even edging closer to our long-term range. The team implemented all new business premium rate corrections. We've seen strong growth, written premium growth on the back of higher renewal increases across the portfolio.
The team has also completed the cancellation of policies that fall outside of our risk appetite. If we exclude these canceled policies, our actual normalized gross written premium growth was nearly 9%. They've implemented additional security requirements for high-risk vehicles. The good news is that Metropolitan has delivered earnings of ZAR 299 million, which is a 49% increase. However, the decline in VNB for Metropolitan is disappointing. It is partly a function of more prudent assumptions and the IFRS 17 impact, but inherently, it's because of a reduction in sales volumes, the sales mix, and the high cost of sales. The value of new business will only improve if these aspects are addressed, which is what the five-point turnaround plan aims to achieve. Over the next 12-18 months, the team aims to significantly improve their new business margin and to achieve ZAR 600 million in normalized headline earnings.
I would like to talk through each of the five focus areas of our turnaround plan. So firstly, when it comes to product commerciality, the team has made good progress and specifically focused on repricing, changes to commission payments, and the review of benefits. Channel workforce management remains a challenge, and we didn't reach our targets in this regard. We're not far off the mark, but we need to increase our number of tied agents and their productivity as well as the premium collection rates in the telechannel. Our biggest channel is recruiting and vesting top-performing advisors, which will positively impact all sales targets. There has been an overall improvement in the quality of new business with fewer policies lapsing.
The business is on track to align their cost base to revenue and realize the required ZAR 50 million savings and expenses, which, with further cost reductions planned for the next financial year. Lastly, we've made good progress on migration and automation. Nothing short of a very, very big project that's been going on there. Our tax-free savings product went live on a new platform, and the performance is stable. Another systems migration was completed in February, and post-migration operations are being monitored closely for stability. Then IFRS 17. I promised you're going to hear a lot about it. It's not a small feat to be able to say that we successfully implemented IFRS 17 on time and on budget. I do think that this requires some special mention. And because it's Risto's team, I know he won't do it.
I'll take the opportunity to mention the highlights of our implementation of IFRS 17. Firstly, the project initiated seven years ago using our own internal resources, who often also led some industry working groups on IFRS 17. We believe that we have met all the global best practice standards with our implementation, and the results have been in line with what we predicted and communicated to the market before. The most valuable part is that we have derived new insights and true business value from the implementation of IFRS 17. We will have a focus session with investors after results to unpack all of these changes and the insights that we've gained. Risto will also give you a sneak preview in his presentation later on.
So Risto, just a real big thank you to your team for IFRS 17 and the project that you've done so well on. Reinvent and Grow. You know our Reinvent and Grow objectives really well by now. If you look at the year to date, we are largely on track to achieve or at least come very close to all of the five Grow objectives on the right. You will also notice that none of the numbers on the right have been readjusted for IFRS 17, which actually lowered our target slightly. At the end of the financial year, in September, we will give you an update on each of our Reinvent and Grow strategic objectives. But for now, I will only discuss a few of the developments that really stand out. And the two of them will be digital transformation and one aspect of growing our existing channels.
There's a lot happening in the business units in the digital space. I'll give you a quick summary of three of the top examples of the impact of technology innovations. The first one is Momentum Life. Myriad direct-to-client life insurance sales that stemmed from digital leads have contributed 25% to new policy sales in the first half of FY2024, growing from just 4% in the first half of last year. This is now just below 10% of our APE for Myriad. We've done almost 25,000 Life Returns Mobile Screenings, showing that our new offering is now firmly vested in the industry. Using the Life Returns Mobile Screening, we now fast-track one out of seven policies, meaning that we underwrite and onboard these 100% digitally without the need for traditional underwriting and medical tests. Health.
Momentum Health Solutions is transforming their existing operating model to a fully digital one, which will enable them to grow, to create scale, and to unlock efficiencies. Now, I wanted to share some of these numbers with you. When I heard them for the first time, I thought they were actually staggering. This business pays more than ZAR 1 billion worth of benefits per week. They administer almost 1 million transactions per working day. Of this, only 4% of captured claims are not done fully digital. There was a 300% increase in leads generated through digital channels, resulting in 80% of retail new business being via digital channels. Then Guardrisk. Most of you know that I'm a farm girl. When about two weeks ago, I learned about this product at Guardrisk office, it made me really excited about its potential.
I decided to use the opportunity to tell you about it today. Guardrisk offers very interesting technology in the agricultural industry. In partnership with a partner, Agnov8, they offer soil moisture insurance, which provides protection against the volatility in soil moisture levels during the most critical growth stages of any rain-fed crop. It is a high-tech product that uses satellite data from NASA, the Copernicus program of the European Space Agency, and many other satellite data providers to consider eight climate indicators and six plant indicators in combination. In addition to soil moisture insurance, this product can unlock much-needed funding to primary farming operations. And the real-time data unlocks a range of management information that is then available to both the reinsurer, the insurer, the lender, and the farmer. It doesn't end there.
Some next steps are to develop crop modeling capabilities and climate change models in support of a new generation sustainable underwriting business. I told my dad about this, and he just said, "Where has the world gone to?" Another good news story that I want to share is about the dominant position we now hold in the independent financial advisor space through our distribution channel, Momentum Distribution Services. You can clearly see the upward trend in support we've been receiving from IFAs. Let me remind you that that remains a very challenging and competitive market. MDS achieved 20% growth in APE on the prior year. This was the highest first half year in our history and also record Q1 and Q2 s.
The APE number of ZAR 2.2 billion is double what we did in the first half of FY2019, which was the base year of our original reset and growth targets. And that was before COVID. This was primarily driven by strong new business performance by MDS for investments, Investo, and Momentum Corporate. MDS specialization is one of the intervention strategies for Myriad, is also paying off. Myriad's APE has stayed flat compared to the last half year. But that is more of an indication of the lack of growth in the insurance market at the moment. It remains a highly competitive market. And we have now once again reached the highest market share in the traditional IFAs life risk space at the end of December 2023. Our specialization focus has allowed us to grow wealth and Momentum Wealth International APE by 18.8% if we compare the last two half years.
In addition to our specialization focus, we continue to also benefit from the high interest rate environment and the need for certainty, which caused a growth of 32.3% in APE for annuities and guaranteed endowments compared to last year this time. We believe that over time, the true benefits of specialization will continue to make us a market leader in the retail investment space in South Africa. We have the highest footprint of specialist consultants servicing IFAs in the wealth market. In conclusion, we've almost reached the end of our three-year Reinvent and Grow strategy, and it is the start of a new season. This is a quick glance into some of the key themes that are emerging as we develop our new strategy, which we will announce at the start of the new financial year.
Firstly, I fully support and believe in the value of our federated operating model. But we must acknowledge that there is a shadow side to a federated model. It sometimes leads to inefficiencies and duplicated efforts. We often compete harder with each other than with our competitors out there. This is an opportunity for enhanced collaboration between businesses. By collaborating to drive better commercial outcomes, I believe that we will be stronger together. By not advising clients on our platforms into our own products, we leave value on the table. Our clients miss out on the best of our offerings. I believe that we can make huge strides with vertical integration and by improving vertical integration, especially through our own advice and our own distribution channels. Growth of our distribution and advice channels will be a key focus area.
To a large extent, our success depends on the footprint and the quality of our tied and independent financial advisors. I've spoken about some of the digital transformation initiatives in my presentation. Digital transformation is now a business imperative, no longer a strategic objective or a strategic choice. The focus will be to ensure that these transformation projects solve for client and advisor needs and deliver on financial and business objectives such as scale and efficiency. It is a challenging economic environment with no growth. So we cannot afford to be complacent about the need for every business in our group to deliver on their promises and to perform to their potential. We are well aware of the underlying challenges in some of our businesses that we need to address. Our commitment is that we will do exactly that.
So to end off, I'm very happy with a strong set of results we can announce in this tough economic environment. I want to thank every employee who worked incredibly hard to ensure a successful first half of our financial year. Given our good progress so far, I'm confident that we will achieve our Reinvent and Grow targets. If Hillie wasn't somewhere in Namibia or in Africa today, I'm sure he would have been very, very proud to hear this. I'm excited about the new phase we are entering as we develop our strategy beyond Reinvent and Grow. Lastly, I believe that purpose-driven organizations over time deliver better results. We have made great progress to refresh our group purpose that unites our businesses towards a common goal. The most important thing that binds us together as a group is our clients.
I'm incredibly passionate about rehumanizing the way we connect with the very people who are the reason for us being in business. We are soon starting a group-wide project to drive client-focused purpose, which will have a significant impact on how we connect and serve our clients and advisors. So imagine the impact if our business could make the shift from administration to service obsession, from transactions to relationships, doing business to human engagement, and interactions to opportunities to show real care. I now hand over to Risto to take us through the financials. Thank you.
No, thanks, Jeanette. It's always a bit more pleasant to come present when the numbers are good. I did reflect on it this morning that it's probably the fourth time in a row, maybe even the fifth time in a row, that results have been a bit better than I expected personally.
I have seen a couple of analyst reports come out this morning. I think the guys are right that the things that surprise me are the things that surprise them. One thing is the mortality profits in the group are actually better than we would have hoped for six months ago. Then secondly, the investment variance is very tricky to forecast, but those were also favorable. So in sports, they say it's better to be lucky than good. But maybe we both. Maybe we're good and lucky. Okay. It is the first time reporting under IFRS 17, which means that this presentation will have a slightly more technical flair than normal. There is a, like Jeanette said, in two weeks' time, there will be an event for the analysts where we'll drill down a lot deeper on IFRS 17.
As an example, we'll actually show you this movement in restatements by business unit. But just to set the scene, the rest of the presentation, I'll talk about the 42% growth. But just to explain what happened in the restatement, the big picture, why did the earnings of ZAR 2.2 billion become ZAR 1.7 billion? There's really two components. There's the ongoing normal component, which is the first three bars. And then there is the very time-specific, six-month-specific component, which are the two big bars. Maybe unfortunately, I have to talk through them. So if I start with the three bars, new business, expected profit, investment, income, you'll see that they actually add up close to zero. I mean, that's the impact of new business recognition under IFRS 17 versus IFRS 4.
It's the fact that we released second-tier margins upfront, but now we're earning interest income on those margins in NAV. Those items don't add up too much. The point is we still stand by our view that IFRS 17 has no real impact on our level of normal earnings. Okay. So that's quite an important statement. And the next two bars are the more volatile ones and explain the decline. So firstly, experience variances are significantly lower now than what we showed 12 months ago for the same time period. One of the core tenets of IFRS 17 is that a lot of these volatile items, instead of coming through earnings now, they go into the CSM and get amortized over the next 10 years, okay, or whatever, the time period of the portfolio. A good example is I see Johannes here.
So last year, the first six months of the year, we had slightly better than expected discounts from Multiply Myriad integration. Now, under IFRS 4, we would have PV'd that improvement in the discounts for the next 20-30 years and outpops ZAR 50-60 million of profit. Under IFRS 17, we put that ZAR 50-60 million in the CSM, and we'll recognize it as ZAR 1-2 million every six months for the next 20 years. Okay. So the point is that positive one-offs in last year's earnings don't come through IFRS 17 the way they did under IFRS 4. It sort of gets spread over the future. It does mean, I think, IFRS 17 earnings will be less volatile than IFRS 4 earnings long term. So that will be a nice feature. The market impact is another one.
And this reflects the fact that we haven't invented the time machine yet. So last year, we hold these tens of billions of ZAR of bonds to match our new-to-book and our risk book and so on. Now, those bonds earn what they earn, you know, 12% returns. And the liabilities we measured last time was on IFRS 4. So the movement in liabilities reflected IFRS 4 modeling. Now we have the same investment returns, but now we have IFRS 17 movements in the liabilities, which is different. So the asset liability gap will be different because the liability measurement is different while the asset returns are the same. The point about the time machine is we can't go back 18 months and hedge the liabilities. We didn't know what they were at the time. You know what I mean?
So it's really a one-off; well, it's a one-off impact in so far that we couldn't match the liabilities that we didn't know what they were at the time. Okay. That is not the most technical slide today. So I'm just warning you. Yeah. Okay. A couple of easy ones to get into it. Key financial measures. So earnings up 42%, as I sort of showed on the previous slide. Important reminder that earnings per share are up 48%, 6% higher. Why is that? We've been buying back shares for the last 18, 24 months. You know, so those buybacks have positive impact on every metric that is measured per share: earnings, dividends, embedded value, and so on. Dividend per share up 20%, 6% dividend per share, reflects good cash generation and solvency in the group. And ROE is something particularly pleasant, 18%, almost 18%.
When we had Investor Day six months ago to illustrate IFRS 17 impacts on our business, we mentioned that the ROE target we always had of 18%-20% might need to be readjusted to 15%-16%. So 18% under IFRS 17 is a very strong ROE for a life insurance company. You know, I think that statement will hold as we look at what the industry results are in terms of return on equity. Embedded value per share, ZAR 35. That's up 12% over the last 12 months. On top of that, we paid ZAR 1.20 dividend. So shareholders would have probably earned about a 14% return on EV per share. Good number again. Sales volumes, as Jeanette said, at record highs. Very pleasing. Less pleasing is the value of new business.
Later in my presentation, I'm going to go into some of the technicalities of the impact that move from IFRS 4 methodology to the IFRS 17 methodology had on VNB. We can explain anyway some of it. The point is, like Jeanette said, you know, we can fight whether it's 200 or 250. The point is it's not high enough. I mean, I think 80% of the business units really need to find a way of improving the underlying profitability of the products they sell, be it either through pricing or distribution efficiency. I think there's very few business units that get a full tick in terms of current level of profitability on new business. Okay. I'll quickly run through some of the key movements in the earnings for the business units. I'll start with Momentum Retail. Significant increase here.
Investment variation is always a bit of a feature in this business. I mean, we got 40-year cash flows in Myriad. They're impossible to hedge. Under IFRS 17, the liabilities are a little bit more economic measured, which means they're a bit easier to hedge. But we will be very satisfied to ever get to, let's say, a 70% hedge effectiveness. You just cannot hedge fully the interest rate risk on a 40- or 50-year book of cash flows. In this current period, there was a bit of a reduction in the yield curve, particularly sort of before the 10-year point. That had a positive impact on the PV of the margins in the Myriad in-force book. So that added most; in fact, a lot of the increase in the earnings is driven by that factor.
On a more operational level, this is a business that has repriced some of its products. That's immediately had an impact in quite a few policies moving from so-called onerous to profitable in terms of classification of IFRS 17. That would have had about a ZAR 50 million impact. Yeah. I mean, there also I mean, one thing I would say is that there was a slight deterioration in the persistency in Myriad. And you'll pick that up in the EV. But now, again, to illustrate how the CSM work, that persistency variance now is a reduction in the CSM rather than coming through current earnings. Okay. Momentum Investments, Jeanette quite rightly said this business had a great six months. And net profits are up about ZAR 100 million. Now, that growth, about a third of it is really the growth in the book. The CSM is growing.
The other two-thirds relate more to the very strong ALM result, very good asset returns. Most of you will know there's a very actively managed bond portfolio back in their annuities. We obviously try to earn significant, well, good risk-adjusted returns from the credit spreads there. And we also engage in quite a bit of trading activities, you know, looking at the swap curve versus government curve. And we had an exceptionally strong six months on the asset side. So in totality, earnings up about 100%. There was also good mortality variance in the annuities. But again, that really gets booked in the CSM and released in the future. But I'll show you later that the contractual service margin, the CSM, which I like to call the store of future profit, that increased by nearly 20% for this annuity book in a six-month period.
So it also gives a bit of a boost for earnings in the future periods. Momentum Investments, asset management profits were down slightly year-on-year. So in the UK, we have an investment consulting business that had a bit of a tougher six months. And then in Momentum Asset Management in South Africa, the incentive costs have gone up quite a bit over the last 12, 18 months. Jeanette is smiling here. I mentioned to her yesterday, I hope the asset management guys don't complain about earnings being lower because of good bonuses. As the FD, I know exactly what to do about that. But yeah. Okay. Metropolitan Life. We spoke about how poor the VNBs on Metropolitan Life. And a big part of that poor VNB is the reality that the lapse assumptions a year ago, we just can't use them anymore.
We have significantly strengthened lapse assumptions, skip premium assumptions, commission clawback assumptions, expense assumptions. So there's a lot more prudent assumptions which hurt the VNB, but they actually protect the earnings a little bit. Okay. At the same time, this is the one business where there's been a lot of urgency around improving collections, things like that. So it is the one area where on EV basis, economic basis, we've also seen an improvement in persistency. So that earnings improvement, you would say it's probably partially real improvement and partially because of the stronger provisioning to start the year. Then we get Momentum Corporate where profitability is extremely pleasing. We continue to show very good profits on risk, on sorry, mortality risk and on disability risk, income protection. So all around strong performance in Corporate. Also, this business unit significantly changed its reinsurance strategy over the last 12 months.
So they have renegotiated new terms with its lead reinsurers. And they have also increased some of the retention levels. So some of the improvement in mortality profits was not just underlying experience. It was also better reinsurance terms and slightly more risk appetite. So far, so good. It's been a really good change from a profitability perspective. Looking at some of the other business units, well, all the other business units, health earnings are slightly down year-on-year. Very complex environment to operate in. But the business model is pretty simple. It's admin fees and admin expenses. The fee income is actually up about 9%, which is a good outcome in the current economy. You can probably break it down to 3% growth in membership. Again, not bad in the current economy. And then an inflationary increase in the admin fee per member.
On the other side, Jeanette mentioned there's significant investment on technology-related projects here. So expenses are up 11% year-on-year. So this is a bit more of a traditional operating margin sort of jaws effect coming through here. Guardrisk, a very, very, very observant listener would maybe notice that the Guardrisk profits for last year have been restated upwards quite a bit. And introduction of IFRS 17, things like discounted reserving, had a very positive impact on its earnings last year when we restated it. So the growth rate is slow, but the absolute profitability of ZAR 360 is strong. You know, so if you annualize that, you get to like ZAR 720.
Now, I'm sure Lourens will not bank ZAR 720 million, but if you think of the fact that this business used to make ZAR 100 million a year, like six, seven years ago, you know, it really has moved to a different level over the years. And the performance is also quite good across the board. I mean, they're sort of traditional business of administration of first and third-party sales that's doing well. The increased underwriting is doing well. Higher interest rates are actually good because this business holds a lot of cash balances for itself and its clients. So a good result from Guardrisk. Momentum Insure, much improved. I think that that sort of that growth needs to continue to be to be like really good, but but at least it's an improvement in the right direction. The claims ratio improved from 73%-71%.
Jeanette spoke about all the things that have been done there. Just in terms of the two events in the period, so the Western Cape floods reduced earnings by about ZAR 20 million. And then the Gauteng hailstorm was about ZAR 50 million. And because of the increased catastrophe cover retention point, we were not able to get any cat cover back on it. You know, so the reinsurers have also tightened their terms. So that whole ZAR 70 million really came into our own P&L. I was, you know, Jeanette said she's a farm girl. When you talk short-term insurance, you talk about weather more than the farmers do. And that's hard. Okay. Now, then looking at Africa, a much better six months from Africa. Namibia being the star of the show there. Namibia had good results, short-term insurance, health business, life insurance.
Some people might not be aware, but Namibia has been a bit of a go-go place lately. And their government bonds are actually trading below the SA government bond curve. And I think our bond portfolio there's earned something like 27%-28% over the last year, which is extremely positive for the profits from the life business, where a lot of the assets backing liabilities are in the government bonds. So a good result from Namibia. India losses are narrowing, I would say, slower than we had hoped for. The growth in the story in India is often similar. If you've got a good product like we do, the growth is unlimited. The growth rates are phenomenal. The problem here is the loss ratio has not developed in the way we had hoped for.
Now, it is getting significant attention from obviously the India management, and we're trying to support it through our health specialists from here. That claims ratio really needs improvement. We are still committed, and we recently had our partners out in South Africa to meet with us. We still believe profitability is possible two years out from here. But it will require the claims ratio to improve. Top-line growth, I'm not so worried. The product is very popular in the various distribution channels in India. Shareholders, this really reflects investment returns on some of the investments at the center, things like venture capital funds. Less head office costs, which are always great value for money, Johann, particularly for you. Now, in the previous period, we had quite a big gain on an investment we have in the U.K. in a business called Moneyhub.
You know, these VC investments, it's always sort of a bit lumpy. So last year, those gains offset any of the head office costs. In the current period, that's a bit more reflective of the ongoing level of costs that we would see at the center. There was also a small tax, negative tax variance in there. Sales volumes, Jeanette's already spoken about these quite a bit. So I'm not going to belabor every point here. I think from a technical perspective, we have changed the discount rate to be lower, which helps the PVNB. I just want to stress that Momentum Investments and Corporate mainly run single premiums. So those growth rates are like real growth rates. So you don't have to worry about any technicalities. Momentum Retail was flattered a bit by the lower discount rate.
And Metropolitan Life is interesting here because despite the lower discount rate, we've seen a 9% reduction in PVNB. This is where some of the new lapse assumptions also play a part. It is that we're sort of expecting the business to be enforced for shorter than we would have a year ago in the previous assumptions. Let me get to the worst slide in lots of ways. New business margins by business unit area. I would say Momentum Investments is the only business unit where we believe the margins are where they probably should be, considering the mix of business, volume of business written, and so on. Elsewhere, work is required. Momentum Corporate is very deal flow, type of deal-driven. So I showed earlier there were very good volumes in corporate. Unfortunately, well, we'll take it. But a lot of it was savings business with very thin margins. Okay.
So VNB is quite low. Now, Dumo, I don't see him here, but I'm hoping he has a few deals with like better margins, maybe some group risk, maybe some FundsAtWork in his pocket. You know, the type of deal can really change the margin in corporate. And I think second half will probably be an improvement. But then if you look at something like Metropolitan Life, I mean, we were worried about the 2.4% last year. Now we had 2.6%. I mean, clearly that is not sustainable. I will show some of the technicalities later. But one way I summarized it yesterday was we can't go back to the assumptions a year ago because the world has changed.
The lapse rates and the expense assumptions, everything we used a year ago, you know, the world has changed and we either need to increase our pricing, we need to improve our productivity, we need to find internal operational ways of setting the negative economy in terms of lapses. There's a lot of work to be done here. I mean, there is no. Even if I adopted IFRS 17 or whatever, 2030, it will be hard to make this a good margin. Okay. So we'll talk about it a bit more later on again. But this is really the one area where I think the strategy Jeanette promised, I think a lot of that strategic thinking is going to be around how do we actually improve new business margin.
Because the move from IFRS 4 to IFRS 17 makes some of the year-on-year numbers difficult to compare, I thought I'll show you the Embedded Value picture because the Embedded Value is largely, not totally, but largely unaffected by the change in the accounting standards. So this gives you more of a year-on-year comparison. So this is where it's quite well illustrated. Our mortality variance has been good last year and they've embedded this year. So when we set the year ago, six months ago, we thought that 440 will maybe become 300. Now here we're sitting on 600. So very good mortality results. And that's universal across the whole business. I think the only area where I think it was worse year-on-year was Botswana. I mean, like you really have to go into the micro detail to find somewhere where the mortality variance went backwards.
Investment market variances are positive. So as much as the real economy is tough, it has not been a shocking period in terms of investment returns, bond returns, and so on. Cash yields are higher. So investment markets were actually a net positive for the period. Not as favorable as last year, but positive. Then you get to items that are a lot more, you know, under uncontrolled in some ways as well. So like expense variances, if you go back six years, Reinvent and Grow, a big part of it was efficiency drive. We went through a period of about four years, four and a half years, where every EV result we had positive expense variances. We're now into a phase in our journey where we're investing significantly on things like replatforming. There must be, I don't know, three, four major platform projects across the group.
Significant investment in digital transformation, you know, enabling self-service in a lot of areas, you know. That has a cost. You can't hide it anywhere. I mean, we in this our cost growth has probably been 10% over the last 12 months, okay? Well above inflation. Those projects are starting to come through as a negative expense variance. Obviously, we're hoping that down the line it will come back in terms of improved VNB, improved expense variances. But I think you need to realize that at the moment, expense variances are negative. Not because costs are out of control. It's because we're consciously investing heavily in modernizing the organization. And then termination variance, this probably reflects the real economy. That, except for Metropolitan Life, we have seen a slight deterioration in persistency in most business units. Okay, and this is maybe the last time we show this slide.
These are death claims. COVID feels very long ago. It wasn't. So 2 years ago, 2.5 years ago, we had the last wave, the last major wave in South Africa of COVID. Death claims for these three businesses were nearly ZAR 8 billion. They're now down to ZAR 4 billion, okay? So, I mean, death claims are running at ZAR 4 billion more than expected. You know, a lot of people are taking pain there. Reinsurers, us, tax, SARS. Okay, so now we sort of recovered to a more normal level. Also, these are not inflation adjusted. So the 3.908 is actually quite strong compared to something like 4.4, 2 years ago. You can sort of maybe adjust another 10% for inflation. This really is the full stop on my comments about better mortality.
I think it's also a full stop on COVID in that I think we can stop talking about COVID mortality impacts now, at least in South African context. Solvency, obviously very important for any financial services company. We're meant to Metropolitan Life at the top. That is our key life insurance business. Accounts for probably 60%-70% of our balance sheet at a group level. We have an internal target of 1.6-2 times the legal minimum. At the moment, we're standing at 2.1 times, you know, so actually above our own internal upper range of the target. Once we pay the proposed dividend, which will cost about ZAR 800 million and the buyback of ZAR 500 million, we'll still be just above 2. So our solvency position remains very strong. In fact, it's probably the strongest since 2016 that I've been here, you know.
So, I think we went through a phase, 2016, 2019, building up solvency. COVID obviously caused a bit of a wobble in it. Now there's been a couple of years of growth. I mentioned to somebody earlier today that it will require somebody with great imagination to be able to drive this business insolvent, okay? It's a pretty strong position, okay? Yeah. Okay, and then Momentum Metropolitan Holdings, that's a group solvency also towards the upper end of the target. Nice, simple graph, dividend growth. Obviously, it's a bit of a nice starting point in the middle of COVID. But anyway, the point is we're showing steady dividend growth here for the last four years and increased dividend by another 20% year on year. We're paying out 36% of earnings, which is towards the lower end of the promise to pay 33%-50% of earnings.
It is really that we wanted to leave some money behind for the buyback as well. We do think that buying back shares at this discount is value accreted to the shareholders. On that theme, just as a reminder of all the buybacks we've done. Back in 2018, 2019, we did a big ZAR 2 billion buyback. The last two years, we've done a number of tranches of smaller buybacks. Across these various tranches, we have bought back over 200 million of our shares. Our shares in issue is down by about 13%-14%. The dividends, earnings, EV per share, those will all be 10% lower roughly without the buyback. Over time, these things accumulate and have quite a big impact on metrics.
Also, the average price, because often when people criticize you for buybacks, it's with a rearview mirror of, okay, you bought these shares back and now three years later your NAV is down or your business is down. I think the realities are EVs grown by probably ZAR 10 since we started the buybacks. And the average price is ZAR 18.50 versus the EV of ZAR 35. I mean, it would have been very hard, I think, to find an investment of a similar return and risk profile as the buyback. So we remain committed to doing buybacks whenever we have surplus capital at the moment. In totality, I mean, there's a few ways to do the calculation, but we estimate we added about ZAR 2 billion of value to our shareholders through the buybacks. This slide, somebody called it a return of the greatest hits.
So we had an analyst visit us recently and he whipped this out in his slides and I remember he showed this like four years ago. Okay. So I thought, okay, let's show this under IFRS 17. And this chart really has two dimensions. At the bottom on the horizontal, you can see where our IFRS capital is currently allocated. Okay. So ZAR 3.2 billion of our IFRS equity is sitting backing Momentum Corporate. ZAR 3.8 billion is backing Momentum Retail. ZAR 4.1 billion, quite a big number, is backing the African operations. We have ZAR 5.4 billion sitting at shareholder at the center. Roughly half of that is the venture capital investments and the other half is discretionary and surplus capital that we hold. And then on the vertical axis, you have the ROE for the last six months. And it tells a few stories, a number of stories.
Some of them are the same as 4 years ago. Some are quite different. So Momentum Corporate is an example. At current level of profitability, ROEs are great, 40%, 45%. Momentum Retail, Metropolitan Life, 25%, 30%, 35%, 40%, mature traditional life insurers generate very good returns because remember, a big part of the profits is coming from business written 20, 30, 15 years ago. Commissions are long paid. You know, running an in-force book well is actually a very good deployment of capital. And while our new business is not at the levels we want it to be, the backbook is very attractive in terms of running it. Maybe a new story here is Guardrisk. So last time we showed this, Guardrisk was in the 15%-20% ROE level. It is now 25%-30%.
Guardrisk has done a lot of conscious work to improve capital efficiency and also the decision to allocate more capital to underwriting has paid off. So they've been good at selecting certain niches of corporate and specialist risks that have been taking. So Guardrisk has really stepped up its ROE contribution to the group. Momentum Investments, the annuities actually have quite a good ROE, but there's also a very big wealth business that is sort of not making huge profits at the moment. So that drags the ROE down a bit. Marius there. But the FNZ project, obviously, a big part of that is to improve the profitability of the platform itself. Africa is an interesting one. It was in that same bucket four years ago, 10%-15%. Not a burning platform, but also like not really generating much returns above cost of capital.
It sort of remains in that area. Also, ZAR 4.1 billion, it's actually the biggest business unit by capital allocation. Okay, it is different countries, but still, we don't talk about Africa maybe as much as some of our peers do, but the reality is Namibia, Lesotho, Botswana, those three in particular actually have quite a big capital base that is earning positive returns, but not massively high. Insure, personal lines insurance is difficult, has been difficult the last few years. So there's ZAR 1.8 billion earning very modest returns there. India's obviously still in a bit of a startup phase. And then shareholders, I think it also illustrates quite well that you don't want to have too much sitting at shareholders, either in cash or in low-returning investments. You know, you can destroy your group ROE very quickly by holding surplus capital.
That is the reason why we like doing the buybacks or special dividends, whatever, as soon as surplus capital arises. The drag of having a big war chest adds up very quickly. Okay. Next slide is my favorite slide, cash generation. Internally, I've been using the, is it a limerick? I don't know. It's a phrase. Phrase lately, like sales volumes is vanity, earnings is sanity, and cash is reality. Okay. So, so as tricky as insurance accounting is, most people understand money in, money out. Okay. So this is really that view. So if I focus on the last six months, SA Life Business, this is the legal entity that houses Momentum Life, Metropolitan Life, Momentum Corporate, and Momentum Investments, the annuity book. It paid a dividend of ZAR 1.5 billion to the group. Previous six months, ZAR 2 billion. Previous six months, ZAR 1.4 billion.
This is the cash machine in the group. This is what funds all our aspirations, all our projects, things like that. The health of this business is critical. Also, the ZAR 1.4 billion, ZAR 1.5 billion, it's not a, it's a number I think is sustainable. Okay. It is quite nice when you have a business unit that generates ZAR 3 billion of free cash flow every year. Okay. It gives you a lot of optionality moving forward. Guardrisk has gone from a very small business to a very good dividend payer, ZAR 150 million-ZAR 200 million every six months. Momentum Investments, we often say we would want more profitability from asset management, but the money they do make, they do tend to pay out in dividends, about ZAR 100 million every six months. Health, another ZAR 100 million. Africa does pay dividends regularly. There are some special dividends like ZAR 495 million second half last year.
There'll be quite a good dividend coming again, I think, from Namibia. If you add those up, we have about ZAR 2 billion of cash coming into MMH, Holdco. I'm not lying when I say that this is actually reconciled to the bank accounts at MMH and MMSI, which is sort of a holding company we control. Okay. That's the cash coming in. Where did we deploy it in the last six months? Maybe a few surprises here because, I mean, but anyway. The VC funds, we invested further ZAR 179 million. These are fintech-focused, sorry, insurtech-focused fintech funds. We deployed ZAR 137 million into Momentum Money. That's approximately 2 years' worth of runway for that business. Momentum Multiply, which is obviously our incentivized wellness scheme. We injected about ZAR 100 million. And then there's a few smaller things there.
After our internal capital allocation, there's ZAR 1.5 billion left at Holdco. That was ZAR 1.5 billion last year, ZAR 2 billion the previous. Okay. So ZAR 1.5-2 billion is maybe the net of internal commitments, cash generation every six months. We're proposing to pay a dividend of ZAR 824 million, ZAR 0.60 per share. We're doing a buyback of ZAR 500 million. The MMH cash position increases by about ZAR 100 million over the year. It's something that's not really covered in the results announcement, but we did get a question from an analyst earlier. The central cash position is about ZAR 2.5-2.6 billion after the dividend and the buyback. So this ZAR 100 million is added to existing surplus capital. Other topical matters. You will be shocked to know that IFRS 17 features here. Yeah. Okay. This is where it starts getting heavy. So, okay.
Now, as we've been advertising the whole time, there's a very exciting IFRS 17 event coming up in two weeks. But I'll just give you a couple of introductory topics here. So I think the first thing about IFRS 17 that I personally think that the CSM, the Contractual Service Margin, will become one of the most analyzed and sort of forecasted numbers in the insurance industry. It is a very good reflection of the store of profit on your life operations or in your insurance operations. You'll see that in the last six months for us at MMH, that increased from ZAR 17.9 billion to ZAR 18.5 billion. 3% growth for six months. Call it 6% inflation for a year. I mean, it's a very simple way of saying, here's the facts. We grew our underlying earnings outlook by about inflation. Is that great? Probably not what we want.
It's not shocking either. It's quite tough out there. Also, if you go to business unit level, it's quite different. So look at Momentum Investments, 2.8%-3.3%. Now, that's probably, I don't know, 15% in six months. That's like 30% per year. That's what's possible when you have a very fast-growing annuity book that is generating better and better profits through mortality and expenses, everything else. On the other side, you'll look, I'll pick Metropolitan Life because Peter's not here and Johan's here looking at me. So you look at MetLife, 3.9%-3.8%. If your VNB is negative, it's very hard to grow your CSM. You're not moving forward. In fact, Metropolitan's earnings outlook maybe went back by 1%-2% in the last six months. Okay.
The other thing that's interesting in this type of presentation is you can easily identify what drives your future earnings growth. You know, okay, the expected growth is nothing but the discount rate. So we discount future cash flows. That will end one at 10% per year, 5% for six months. Every year, we recognize some of the profit. That recognition is somehow linked to the length of the book. So you could say that we recognize our CSM over an 8-year period on average. If you write no new business, you look at that ratio, you're going to shrink by 1% or 2% every six months. Okay. Writing 4% new business sort of gets us to a small positive. The fact that we manage our in-force book well gives us a positive change in estimates that enables inflationary growth.
I chatted to Jeanette yesterday saying, this is a very simple way to illustrate also. If we want to go from an inflationary business to, let's say, 10% per year, what do you need? You need that 4 to go to 6. Okay. You need your VNB to double. Sorry, go up 50%. Like, you don't want to do the math for what's required to become a 20% per year growth company. Okay. But I think like 10% per year is doable for us. I mean, I think we all believe our VNB is at least 50% too low. Okay. And then this picture will look quite different. Okay. Very exciting, beautiful finance slide. Lots of color, interesting graphics. Okay. Now, now don't worry about the stuff at the top. For a lot of you, it's interesting and we can talk about it when we meet one-on-one. Okay.
What's more interesting is the total earnings line. That is the IFRS earnings for the SA Life business. ZAR 2 billion this year, ZAR 1.4 billion last year. The box below is something new in IFRS 17. The first line is the present value of future cash flows. That is the PV of what we consider the best estimate profit, the economic profit. If there was nobody telling us that you have to be prudent or whatever, we think we created ZAR 2.4 billion of economic value in six months, up from ZAR 2 billion previous six months. However, IFRS 17 is quite specific on how do you allow for the risk that you undertook and also to what degree can you take profits today versus in the future.
So we had to defer about ZAR 500 million of those profits to be realized over future as the risk and the service is given to the policyholders. Now, I think that 80% is not a bad ratio for us. So in a normal year, you'll probably see that. Also, what I like about this, that in the old days, in other words, six months ago, the other day, a life company could take the 2.4 and show you 3 or 1. There was huge discretion in terms of the timing of the profit recognition. IFRS 17 makes it a lot more prescriptive. So I think earnings are going to become a lot more comparable between insurance companies. And I think this is a compulsory disclosure as well.
So you'll be able to see what was the economic profit versus what was actually recognized in the time period and tracked it over time. The other topical matter, unfortunately, is VNB. Two years from now, we're going to have a topical matter like explaining why it's so big, Jeanette. How's that? So good idea. Okay. So as a starting point, we're not really comparing like for like. Unfortunately, and because of just realities of trying to get the project done, we do not have a full VNB on the current basis for the interims. We do have it full year. So I'm using full year numbers here. And we reported ZAR 600 million as VNB last year for the full year. Using the current methodology, the number becomes ZAR 511 million, about a 15% drop. It's a bit more than we thought a year ago.
A year ago, we were hoping for a 10% reduction in VNB. There are two key changes we have made with the introduction of IFRS 17. The first one is what's called risk-neutral discounting. IFRS 17 expects you to use market-consistent principles when you calculate your liabilities. What that basically means, it's not simple English, but simpler English, is you cannot take credit for equity risk premiums and credit risk premiums upfront. You have to wait till it's earned. It basically means that you project your future cash flows assuming risk-free returns and you discount them at risk-free. You almost like treat your best estimate cash flows under the risk-free buildup as fixed cash flows. So you discount them at risk-free. That is a net positive. So what we lose on things like Investo, because we accumulate assets slower, we gain more by using the risk-free discount for the risk book.
So overall, that move added about ZAR 150 million to VNB. However, because we're now using risk-free discount rates, we can't exactly say that that's a conservative number. So what we do is we calculate a risk adjustment on that book, on that book of new business. And the way we do it is we're saying we take these estimates that are 50/50. Nobody's going to discount it at risk-free, okay? So we construct a scenario where we stress-test the cash flows projected to 85th percentile. That's when we talk about the 85th percentile confidence interval approach. It's basically one and a half standard deviations. So we will take something like Metropolitan Life and we'll sort of stress-test lapses to the 85th percentile. We'll stress-test mortality, 85th percentile. Big impact on MetLife. Why is that? Because it's very sensitive to lapses.
You move 1.5 standard deviation and lapses, you've got a big reduction in VNB. On the other side, you've got annuities, very small impact. You stress-test annuity book, 1.5 standard deviation, not much changes. I haven't done it, but I'm guessing at 99.9 percentile, longevity becomes a big thing. Then it becomes maybe bigger. But 1.5 standard deviations is not a big event on annuities. Most actuaries like this approach, even though it's quite technical, because it looks at the specifics of the book you're writing rather than a global discount rate that you attach. You know, so I think it better captures the downside risks of the different blocks of new business you're writing.
I think there's a bit of bias here as well because I've always been a big supporter of the annuities and the new methodology also supports that view. Okay, how does this impact different business units? Okay, first is a group view. So we did not have VNB for last year on the new basis. What we tried to do is we tried to calculate six months VNB now if we could go back a year to use the same approach as a year ago. So at group level, we think the ZAR 200 would have been ZAR 363. Okay? Now, what has resulted in the reduction from the ZAR 363 to the ZAR 200? First thing is change in estimates. We have we are using more conservative lapse assumptions. A good example is the Metropolitan Life book.
Okay, so even if we used the old economic methodology, we would have had lower VNB because we have had to change our assumptions because lapses have been poor, for example, and expenses have been higher. The EV methodology, all this complicated technical stuff, reduces about another ZAR 35 million. And then there's residual, which, as Johannes, as an actuary, knows, that's the unexplained part. But okay. So the biggest driver of the VNB reduction is not the new methodology. It is the fact that we have had to change assumptions because of recent history of lapses, expenses, commission clawbacks, and other factors. The business unit most affected is Metropolitan. So we think on old basis, the VNB would have been ZAR 69 million positive. But then changing lapse assumptions, which we did already end of last year, that immediately brings it negative.
So even if we had not changed an IFRS 17 methodology, we would have still published a small negative VNB for Metropolitan Life for the period. The new VNB methodology almost like adds insult to injury by being more penal on the risk attached to that book and brings the VNB of Metropolitan Life to a low level. Momentum Retail included here to illustrate that we think the VNB would have been very similar period-on-period. Now, there's actually been positive changes in assumptions. A good method is the introduction of a better assumption set for integrated product Life Returns. Okay. So there's been some positive adjustments there. The EV methodology, again, a little bit penal, okay, quite penal on Momentum Retail, but offset by other factors. So we think the VNB would have been unchanged.
On the positive side, as I mentioned earlier, annuities actually look good under this methodology. It gets this boost from the fact that it's got quite a low risk attached to it and EV goes up, VNB goes up. Okay. The lecture is almost over. It is actually over. I'll now conclude. Bit of a financial lens maybe on the conclusion as well. I think the current absolute level of earnings, I think, is strong for this portfolio of businesses. As I mentioned right in the beginning, I think I would have taken ZAR 2.2 if offered six months ago. Now we have ZAR 2.4. I do think we can make the adjusted IFRS 17 target, but it requires another good six months. Okay. I also don't think the earnings are like massively favored by one-off. That's a nice thing about IFRS 17.
Those things aren't as big. So yeah, good, good, good, good, good, good place to start the second half from in terms of earnings. I also want to stress that the balance sheet is as strong as I've seen it and cash generation remains very favorable. Also, while we sort of wallow a bit in the negative or the poor VNB, we mustn't forget that we're in an excellent position in lots of areas. You know, IFAs remain a critical distribution channel in South Africa and I think we can lead, well, not easily, but we will claim we're the leading insurer in the IFA channels. Corporate business is doing extremely well. I think the FundsAtWork are offering their group risk expertise in a very strong position.
Also, Guardrisk is a—I mean, I don't think anybody dares to claim that Guardrisk is not the number one insurer in its own space. So there's a lot of good things beyond that VNB that has been bothering us. Yeah. And as I mentioned, VNB is our Achilles heel. It will be the number one thing to fix in the group. I think the way we manage our in-force book is as good as—no, okay. I mean, there's always some scope for improvement, but I mean, it's good enough. That's for sure. It's the VNB that needs to improve. And then the last conclusion, which is not a financial thing, is just a big congratulation to staff once again. Like I said, it's probably the fourth or fifth time in a row that instead of saying thank you for your efforts, we're saying congratulations.
That's the code word for when we're happy versus we're satisfied. It's congratulations to our staff and then obviously thank you to our clients and our advisors. I think we often make the point that as an organization, we really believe in the value of advice. And advisors are a very important sort of partner to us and we want to thank them and our clients. I will now hand over to Dan for Q&A. Thanks, Dan. Thanks, man.
Great. Give him another round of applause. Don't be shy. Now, now, now I know, Jeanette, now I know why we are in Risto's office. He knew this was going to be a very technical presentation today with this IFRS 17 stuff. Thank you very much and well done on that. Okay, we've got a couple of questions. They are technical as it happens.
So we'll, yes, for Risto, you're quite right, Jeanette. This is from our Corpcam platform. Risto, I'll take there's 2 questions from Michael Christelis at UBS. We'll join them together and then you can come up and answer them. The first one is how much are you spending on the RMI IM transaction and what does the pro forma excess capital look like after this and your buyback? That will be the first part. And the last part of Michael's question, the other question is what is the outlook for mortality variances over, say, the next 12-18 months? Can you tackle those two first?
Yeah, Mike. So I did mention in the presentation that after the dividend and the buyback, the discretionary capital is ZAR 2 billion and the pure surplus is about ZAR 650-700 million. So those numbers are post.
I mean, obviously the number would have been closer to ZAR 4 billion in total before the dividend and buyback. We have agreed with the parties that we're not going to disclose detailed details around the transaction terms and price on RMI. But I, it will not have a material impact on our capital position. Mortality outlook for second half, that's always an interesting one because it's quite dynamic, particularly in the corporate area. I would guess it's more likely to be a little bit lower than a little bit higher. I also don't think it's going to fall off the cliff. I think particularly in the retail business, it's going to be quite sustainable. And in corporate, obviously, you must remember we lost like ZAR 2 billion during COVID in the corporate business.
So we're going to be, we will try and maintain decent margins to have decent returns on capital as long as we can. I mean, the level of market competition will determine how quickly that moderates.
Thank you. Thank you, Risto. There is a question for you, Jeanette. Let's just, before I ask Risto for the last technical one. What is your market share in IFA Affluent Risk currently? Does this fit your leading market position description?
It does, actually. So it is that we have the number one position for Myriad in that space and it's 17.5% at the moment. Yeah. And we've been maintaining that level for quite some time now. But you know, it is highly competitive. So every quarter we hold our breath about whether it's going to be the top one, but it's 17.5%. Okay. Thank you.
Risto, this next one is a long technical one, but it's from Marius Strydom at ALG. He says, "We at ALG agree that IFRS 17 provides new insights and true business value." I mean, as you presented here, we specifically note two areas that need to be explained and addressed, namely that onerous contracts for life risk, the GMM approach, had a negative impact of some 28% on operating profit, which is their initial calculations, and unallocated expenses a negative impact of some 23% on operating profit. Why is this so large and what are you doing to bring this down substantially?
Thanks, Marius. I'm personally not doing too much, but okay, so on IFRS 17, just for everybody's benefit, because Marius is the expert on IFRS 17.
One new thing that I quite like as well in IFRS 17 is if you write business that is loss-making, you have to take the loss upfront for the whole contract term. So it's very penal to write onerous business. However, if you write profitable business, then you amortize it over the contract term. Okay. So there's quite a different treatment for onerous business versus profitable business. Our onerous contracts are high. As an example, with Metropolitan, under the new assumptions, a lot of the business that was previously seen as profitable is now seen as onerous. Okay. So a big reason why the number is big and why it increased year-on-year is because of reclassification of a lot of funeral business from profitable to onerous. So it would have had a zero impact if it was treated as profitable.
Now it has quite a, I think, I think the onerous contracts in Metropolitan alone are over ZAR 100 million. On the other side, there have been improvements. So in Johan's business, by changing some of the pricing, there's been actually about a ZAR 50 million movement from onerous to profitable. But he is right. I mean, the simple answer is our poor VNB is linked to that. We write too much business that is loss-making. You know, it comes through there. The non-attributable expenses, so okay, I'm not even going to try to explain it fully, but Marius will know what I'm talking about, is that your project costs, so various replatforming projects we're doing as an example, they cannot be allocated to specific policies, which means that they're not included in the cash flows of a policy. They're not within the full cash flows.
A lot of the project costs come as a non-attributable expense and they will remain quite high for maybe another year or two until a lot of these projects start running out.
Okay. Thank you. Thank you very much, Risto. Thank you, Marius and Michael, for the questions. This is where we're going to end the Q&A session. As Jeanette said earlier, and Risto as well, they're going to be engaging with the investor analyst from today over the next few days and in the next two weeks or so. There's also media engagements that are going to happen. Let's give them another round of applause as we conclude here. Thank you very much, Jeanette. Thank you to you, to you, Risto. I think this is where we're ending our our presentation this afternoon of the interim results.
I've seen one headline already in the media, which is really positive so far for Momentum. So you'll be smiling, hopefully, this afternoon most of the time. Thank you very much for being here and enjoy the rest of the day. Thank you.