Analysts estimates show 2019 could be another rocky year for insurers
Sanlam, Old Mutual and Liberty all saw their investment returns decline in 2018 as the JSE all-share index lost 11.37%
Equity analysts are divided about how the country’s largest insurer, Sanlam, will perform in 2019. The company published analysts’ estimates which show that they all expect it to lift headline earnings and value to shareholders. The estimates, based on input of five sell-side analysts, are similar to analyst consensus that Bloomberg and Reuters publish about listed companies. They were, however, compiled in February, before Sanlam reported the decline in 2018 earnings. Like other life insurers, Sanlam had a tough 2018, thanks to South African equity market losses, which caused the insurer’s investment returns to plummet 57%. Its peers, Old Mutual and Liberty also saw their investment returns decline by 41% and 81%, respectively, as the JSE all-share index lost 11.37% in 2018. After seeing 2018 profit declines, analysts said life insurers might continue to struggle if the weak equity markets persist and consumer spending does not turn the corner.
The disparity between highest...
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