South Africa’s 108 year-old insurer is changing in front of everyone’s eyes

South Africa’s biggest insurer Sanlam is looking to expand its operations further outside the country, presenting a compelling opportunity for potential investors.

PSG Head of Equity Solutions Pierre Muller and Senior Equity Analyst Marnus Piekaar gave a buy recommendation on Sanlam in a recent episode of PSG Wealth’s Investment Idea series.

This recommendation was primarily based on the group’s diversified insurance and wealth service offerings, distributed across three key regions: South Africa, pan-Africa, and Asia.

The group, which was founded in 1918 as a life insurance company before branching out into other financial services, held 10% of South Africa’s insurance sector in 2024.

Outside of South Africa, Sanlam has a presence in 25 other countries across Africa through SanlamAllianz, a joint financial services venture between Sanlam and Germany’s Allianz.

Together, the two companies offer insurance, asset management, and financial solutions to countries such as Nigeria, Egypt, Kenya, and more.

In Asia, Sanlam holds a long-standing partnership with India’s Shriram Group, which Sanlam group executives have identified as a key international growth engine.

“Its broad South African franchise is complemented by exposure to Africa, India, and other international markets,” Muller and Piekaar explained.

“This geographic and business diversification supports earnings resilience, recurring fee income, and long-term growth opportunities.”

Muller and Piekaar also pointed to Sanlam’s financial results for FY25, wherein the company reported total insurance revenue of R102.9 billion, a growth of 10% from FY24.

The group’s strong balance sheet and capital position, alongside its ability to deliver consistent returns, are seen as critical for supporting future growth opportunities.

This growth is supported by lower insurance penetration, higher savings demand, and acquisition-led expansion across Sanlam’s African and Indian markets.

Sanlam’s share price is currently trading at around R88 per share, a 12% upside to the intrinsic share value of R99 which Muller and Piekaar gave the group.

“This suggests the market is not fully reflecting the benefits of its diversified franchise, acquisition strategy, and long-term growth opportunities,” Muller and Piekaar said.

Sanlam’s expansion plans

Sanlam is pushing ahead with its growth strategy, aiming to achieve real earnings growth and dividend growth of 6% and 4% per annum by 2030, respectively, as well as a return-on-investment of over 20%.

Additionally, the group aims to more than double its earnings across its pan-African operations by 2030, seeing the region as one of its biggest growth vectors.

SanlamAllianz is the largest insurer on the African continent, valued at nearly R35 billion and holding a 16% market share across both the general insurance and life insurance markets.

During the first half of 2025, SanlamAllianz’s attributable earnings rose 124% to R3.8 billion, alongside general insurance premium growth and life insurance premium growth of 8% and 10%, respectively.

“Africa represents one of the most compelling long-term growth opportunities in the global insurance landscape,” former SanlamAllianz CEO Heinie Werth said at Sanlam’s Capital Markets Day last October.

“With low penetration, strong GDP growth and a youthful, digitally connected population, the continent is poised for transformation.”

To achieve this earnings growth, SanlamAllianz said it would look at entering new markets with high potential, whilst simultaneously exiting unattractive ones.

At the same time, the group is seeking to expand its partnership with Shriram in order to grow its Indian market to potentially rival South Africa in terms of earnings.

Sanlam has held an investment in Shriram for more than 20 years, with the two companies currently serving more than 32 million customers.

Sanlam increased its stake in Shriram Life Insurance Company to 49% in July 2026, acquiring Piramal Finance’s 7% shareholding in the company.

Sanlam Group Executive for Strategy David Marshall described Sanlam’s Indian market as a “cornerstone” of the group’s growth strategy.

“The combination of Shriram’s deep local expertise and distribution strength with Sanlam’s technical capabilities and long-term capital creates a powerful platform,” Marshall said.

“We are confident that this partnership will deliver meaningful value to our customers, generate strong returns for our shareholders, and contribute to India’s broader objective of advancing financial inclusion.”

Sanlam said it expects its India operations to deliver growth at South African CPI plus 10% between 2025 and 2030, and plans to add 10 million new customers over the same period.