The Sanlam Group announced a solid operational performance for the 10 months to 31 October 2016, with total new business volumes of R195 billion, up 11 per cent on the first 10 months of the 2015 financial year.
Sanlam Personal Finance achieved 3 per cent growth in new business sales, with pressure on discretionary single premium savings sales persisting. Sanlam Sky new business volumes were in line with the high base of 2015. The focus on improving the mix of business yielded positive results, contributing to 11 per cent growth in individual life risk business sales in Sanlam Sky, a particularly satisfactory improvement since the end of June 2016.
Sanlam Emerging Markets achieved overall new business growth of 67 per cent, supported by a weaker average rand exchange rate and the impact of corporate activity. Excluding corporate activity, new business volumes increased by some 50 per cent.
All major SEM businesses contributed to good growth, apart from Zambia and Malawi that continue to struggle in difficult environments.
In Malaysia the general insurance premium growth was impacted by weak motorcycle sales and a slower than anticipated diversification of the product set. New life business volumes increased by 5 per cent, the combined effect of lower annuity sales in Botswana and good growth in the other regions. Investment business grew by 96 per cent, supported by a R4.6 billion new mandate from the Botswana Public Officers Pension Fund. General insurance net earned premiums increased by 130 per cent (17 per cent, excluding Saham Finances).
Sanlam Investments increased its new business volumes by 10%, with Sanlam Employee Benefits and the SA Investment management businesses achieving particularly good growth.
Gross written premium growth at Santam was under pressure, specifically in the specialist insurance lines, resulting in a lower growth rate compared to June 2016.
Net value of new life business (VNB) on a consistent economic basis increased by 8 per cent compared to the same period in 2015 (6 per cent up based on actual 31 October 2016 economic basis).
Overall net fund inflows of R32 billion were achieved, up from R11 billion during the comparable period in 2015. The comparable 2015 period included the Botswana Public Officers Pension Fund withdrawal from Sanlam Emerging Markets and Sanlam Investments as well as the Public Investment Corporation withdrawal from Sanlam Investments.
Net result from financial services increased by 10 per cent on the first 10 months of 2015. Most businesses contributed satisfactorily, apart from SI where fund-based fee income was impacted by lower average market values.
“We are satisfied with our operational performance in the first 10 months of the financial year in the current economic climate. We remain focused on executing our strategy as we believe it will enable us to sustain performance in the long term,” says Sanlam Group CEO Ian Kirk.
As at 31 October 2016, Sanlam’s available discretionary capital amounted to R3.6 billion, which is earmarked for transactions currently under consideration.