South Africa’s biggest insurer feeling the pain of Ninety One mega deal

Sanlam expects an increase of up to 34% in its earnings per share (EPS), but a decrease of up to 20% in headline earnings per share (HEPS).

The insurance giant’s earnings benefited from a once-off gain on the disposal of its Sanlam Investments active asset manager business.

However, its headline earnings were under pressure due to a decline in shareholder investment returns compared to the first half of 2025.

This was revealed in Sanlam’s trading update for the six months through June 2026, which contained the insurer’s earnings expectations for the first half of the 2026 financial year.

Sanlam explained that its EPS are expected to increase mainly due to one-off gains from the disposal of the Sanlam Investments active asset manager.

EPS also benefited from the gain recognised when Sanlam’s shareholding in Shriram Finance was diluted, following the Mitsubishi UFJ Financial Group’s capital injection. 

“The gain crystallises value in a long-held investment, with new capital introduced at a valuation that recognises Shriram Finance’s growth,” the company said.

This fresh capital also supports the value of Sanlam’s remaining shareholding.

However, Sanlam’s HEPS excludes these once-off gains, which is why they diverged so sharply from EPS.

Sanlam’s HEPS are expected to decline because shareholder investment returns were lower than in 2025 across the group’s portfolio. 

“This reflects negative fair value movement in the listed equity exposure to Ninety One following the closing of the transaction on 2 February 2026,” the group said.

In November 2024, Sanlam and Ninety One announced that they had entered into a binding framework agreement to create a 15-year partnership.

Per the agreement, Sanlam appointed Ninety One as the primary active investment manager for its local and global products. 

Ninety One, in turn, bought Sanlam’s active investment management business, Sanlam Investments.

The transaction closed in February 2026, which is why the deal’s impact will be seen in Sanlam’s results for the six months ended 30 June 2026.

Sanlam’s HEPS also came under pressure from weaker market conditions in Morocco and India.

Despite this hit, Sanlam said it generated strong business volumes and positive net client cash flows during the six-month period.

This, the firm said, reflects continued client demand and the strength of its market positions across key businesses. 

It also noted that elevated weather-related and large claims in both South Africa and Pan Africa impacted general insurance earnings.

However, the group’s diversified portfolio and strong capital position supported value creation and cash generation. 

Sanlam’s interim results for the six months through June 2026 will be released on Thursday, 10 September 2026.

The table below shows Sanlam’s projected earnings for the six-month period.