for the year ended 31 December 2008

Management has determined the operating segments based on the way the business is managed, and the reports used by the executive committee to make strategic decisions reflect this.

The committee considers the business from both a geographic and product perspective. The South African operations are segregated into retail, corporate, asset management, health and shareholders capital. The international companies, Botswana, Ghana, Kenya, Lesotho, Mauritius, Namibia, Nigeria and Swaziland, are all managed as one operating segment.

Although Metropolitan Card Operations (Pty) Ltd and Metropolitan Capital group represent separate operating segments, they do not meet the quantitative thresholds required by IFRS 8 – Operating segments and are therefore reported with shareholder capital.

The reportable operating segments derive their revenue as follows:

  • Retail (includes Union Life Ltd, Metropolitan Odyssey Ltd and DirectFin Solutions (Pty) Ltd) – development, distribution and administration of individual life investment and risk products
  • Corporate (includes Metropolitan Retirement Administrators (Pty) Ltd) – all aspects of retirement fund business including investment, risk management, actuarial consulting and administration
  • Asset management – all aspects of active asset management, collective investment management, property management and administration, on behalf of all businesses within the group and third parties
  • Health – provision of medical aid administration services, health risk management strategies, managed healthcare and administration system franchising to both corporate and retail healthcare schemes
  • Shareholder capital – consists of the holding company, Metropolitan Card Operations (Pty) Ltd, Metropolitan Capital group and the shareholders excess in Metropolitan Life Ltd, Metropolitan Odyssey Ltd and Union Life Ltd
  • International – development, distribution and administration of individual life investment and risk products as well as retirement fund business.

Inter-segment fees are charged out at arm’s length.

The executive committee assesses the performance of the operating segments based on diluted core headline earnings. This measurement basis excludes the effect of net realised and fair value gains, investment variances and basis changes. For the operating segments, diluted core headline earnings also exclude the effect of investment income, as this income is managed on a group basis and is therefore included in the shareholder capital segment.

This measurement includes the effect of finance costs on issued debt but excludes that of the convertible redeemable preference shares. Furthermore, treasury shares held on behalf of contract holders are deemed to be issued and all minority interests (not recognised for accounting purposes) and investment returns are reinstated.

A reconciliation of diluted core headline earnings to earnings is provided in note 37.

The amounts provided to the executive committee with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. The assets for both the retail and corporate segments are set equal to the contract holder liabilities, as these liabilities are equally matched with assets, plus the allocated economic capital and capital of non-life subsidiaries included in these segments.


For Metropolitan Life Ltd the operating segments include retail, corporate and shareholder capital.


The group and Metropolitan Life Limited segment reports have been restated for the derecognition of certain policy loans and the related insurance and investment contract liabilities. Segment benefits and claims were increased by R36 million for the group and R40 million for Metropolitan Life Limited. Insurance contract premiums, investment contract premiums and fee income have also been restated, refer note 17.

The group adjustments have also been split out from the shareholder capital segment.