The low-income consumer segment could be the goose that lays the golden egg for Sanlam’s SA insurance operations in 2018. Sanlam’s retail operations aimed at the middle and upper end of the market reported a 2% decline in net operating profit in the six months to June, while Sanlam Sky, which provides funeral policies and life cover to low-income earners, reported an 8% improvement. Sanlam Sky’s new business volumes surged 77%, while the value jumped 20%. The growth in the low-income market provided a glimmer of hope amid subdued consumer spending. Old Mutual’s Mass and Foundation Cluster increased its value of new business 12% when it presented results at the end of August. However, the performance of these two insurers is in sharp contrast with MMI, which saw a 14% decline in headline earnings in its business aimed at low-income earners when it reported results this week. While Sanlam Sky contributes about 16.5% of the group’s profits, the value of new business from this division ...

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