Sanlam expects significant half-year earnings boost

Sanlam expects a massive increase in earnings for the first half of this year, as the insurer benefitted from

Sanlam informed shareholders today that it expects a significant earnings increase for the period via a trading update for the six months ended 30 June 2023.

The insurer expects the following earnings ranges for the six months ended 30 June 2023:

Sanlam said it recorded strong performance in H1, with all clusters and lines of business performing well. 

The main items contributing to this significant growth in net result from financial services (NRFFS) are: 

• Life insurance benefitted from positive risk experience, increased asset-based fee income and improved performance from the credit portfolio backing life insurance liabilities.
• General insurance benefitted from improved underwriting performance and higher investment return on insurance funds.
• Credit and structuring benefitted from stronger performance from the Indian operations.

Cash NRFFS represent NRFFS as adjusted for the reversal of specific non-cash items, including the amortisation of intangible assets and the reversal of changes in insurance contract assets (i.e., negative liabilities). 

Sanlam said the higher expected percentage increase in net operational earnings relative to net result from financial services is due to higher investment returns on the shareholder capital portfolio, included in net operational earnings. 

The main contributors to the higher growth in HEPS relative to net operational earnings were non-economic accounting mismatch profits and losses recognised in terms of IFRS, lower amortisation of value of business acquired, and adjustments emanating from the implementation of the IFRS 17 insurance contracts standards.

The lower increase in EPS compared to HEPS is due to lower profit on disposal of operations in 2023 relative to 2022.

Sanlam’s 2023 interim financial results will be released on Thursday, 7 September 2023.

The insurer’s share price has reacted positively to this news, as it is up over 2.5% at 16:10 on Thursday after the update was released.