Sanlam Emerging Markets in resilient operational performance in 2017
By Insurance24
HARARE, The Sanlam Group performance for the year ended 31 December 2017 reflects a resilient operational performance with substantial growth in Sanlam Emerging Markets and Sanlam Investments.
In 2015 Sanlam, the South African group entered the Zimbabwean market by acquiring a 40% stake in Masawara Plc. Sanlam therefore has a 40% indirect stake in Zimnat Life and Zimnat Lion.
According to the FY17 results, the Sanlan Emerging Markets (SEM) which the Zimbabwean operations fall under grew its net result from financial services by 15% including structural activity and exchange rate differences. Organic growth in constant currency amounted to 10%.
SEM is responsible for Sanlam’s financial business services that include life assurance, general insurance, banking, credit, health, bancassurance and asset management in emerging markets outside South Africa.
Additionally, during the year under review, SEM acquired a non-controlling interests in the Soras Group in Rwanda for R113 million and invested R94 million to capitalise its Ugandan business, which expanded its product lines through the acquisition of Lion Assurance, a general insurance business.
Zimnat last year unveiled a new brand that incorporates Sanlam and following the rebranding exercise, all the group’s subsidiaries now fall under one universal logo which maintains the Zimnat legacy of green, with a blue highlight to show the Sanlam link.
Zimnat has been a leading player in the Zimbabwean life assurance and short-term insurance industries since 1946. The Group has a good credit rating of A- for both the life assurance and short-term insurance businesses, and an asset base of $92 mln.
Meanwhile, during fy17, the Sanlam Group’s performance was underpinned by good progress across all of the Group’s strategic pillars.
Sanlam Group Chief Executive Officer, Ian Kirk, commenting on the results said: “We are pleased with the overall solid performance of the Group, which is the result of our sustained focus on executing our strategy, supported by our committed staff and multi-level management team. Despite the challenging economic and political environments in recent years, we have achieved pleasing growth rates in most key performance indicators.
“This is a fitting tribute to those who came before us in building and sustaining this resilient business in the past 100 years and we are grateful to our various stakeholders and partners who have been part of Sanlam over the years,” he said.
New business volumes declined by 1%, amid pressure on single premiums in South Africa, Namibia and Botswana.
Life insurance new business volumes increased by 2%, investment business inflows declined by 5% and general insurance-earned premiums increased by 16%.
Excluding structural activity, exchange rate differences and the R4.6 billion new mandate received from the Botswana Public Officers’ Pension Fund in 2016, new business volumes increased by 1%.
A decline in lower-margin single premium business conceals strong growth in the more profitable lines of recurring premium business. Sanlam Sky and Individual Life within SPF achieved sterling growth in sales of recurring premium risk business, which contributed to an exceptional value of new life business performance.
Net result from financial services (net operating profit) increased by 7% (10% in constant currency) to R8.5 billion compared to the same period in 2016, with substantial growth in Sanlam Emerging Markets (SEM) and Sanlam Investments’ (SI) contributions.
