Sanlam grows new business by double digits after boost from Morocco
The insurer says this helped offset pressure on SA’s middle-income consumers as the local market struggles
Insurer Sanlam said on Thursday strong growth in some of its African operations helped offset economic pressure on SA’s middle-income consumers in its year to end-December, when it managed double-digit growth in new business volumes.
SA’s largest insurer said its diversification into new regions was paying off, with North and West Africa the standout performer for the year, growing new business volumes by 81%.
The group’s push into the rest of Africa was given a boost in 2018 when it bought Moroccan insurance firm Saham Finances.
New business volumes rose 12% to R249.32bn for the group during the period, but the insurer said SA’s economic environment was particularly disappointing, with the period seeing a lack of progress in implementing structural reforms or addressing the sustainability of state-owned enterprises.
This was evident in Sanlam Personal Finance (SPF), with the group saying there was continued pressure on Glacier and the middle-income market.
SPF’s performance picked up in the second half of the year, with that division growing new business volumes by 1% during the year. The low demand for single premium life business had a negative effect on SPF’s net fund inflows, however, which decreased 7% to R10.3bn.
Sanlam Emerging Markets — which includes its rest of Africa operations — grew net operating profit 29% to R2.63bn for the period, now contributing just over a quarter of the group's total.
Sanlam declared a dividend per share of 334 cents, up 7.1% from the prior period.
In early afternoon trade on Thursday, Sanlam's share price was down 5% to R60.78, having fallen 23.16% so far in 2020.
Update: March 12 2020
This article has been updated with additional information.