Dark clouds with silver linings for South Africa’s biggest insurer

South Africa’s biggest insurer, Sanlam, reported a mixed bag for its 2025 financial year, with a decline in earnings combined with strong new business growth.

On Thursday, 12 March, Sanlam released its results for the year through December 2025, which revealed a solid set of results for the insurance giant.

It reported net income of R10.05 billion, a 10.77% increase from its 2024 financial year. 

Lower administration costs led to a reduction in expenses, and a R1.52 billion reversal of impairment allowed Sanlam to report an over 45% increase in its profit for the year to R11.52 billion.

However, the company reported slightly lower net operational earnings for the 2025 financial year, down 7% to R17.15 billion.

This was largely due to a 39% increase in corporate and other expenses, driven by higher investment in client experience system modernisation.

The majority of Sanlam’s earnings were generated by its life insurance and health operations, which contributed R9.26 billion, a slight 1% decrease from 2024.

The company explained that favourable mortality experience and stronger higher-asset fee income boosted this segment’s results. However, this was slightly offset by ongoing operational pressures in its South Africa health portfolio.

In contrast, Sanlam’s general insurance business showed strong earnings growth of 17% to R3.58 billion, while its investment management operations grew earnings by 7% to R1.51 billion.

The general insurance business benefited from lower attritional and large weather-related claims in South Africa.

However, Sanlam’s Pan-Africa operations were affected by higher tax settlements, increased tax provisions and elevated corporate claims.

The investment management business’s growth was attributed to a solid performance from Sanlam’s South African asset management business and its Glacier business.

The insurer noted that its investment returns over the period were negatively impacted by foreign exchange translation losses and higher funding costs.

Therefore, Sanlam reported a net investment return of R1.96 billion, a 44.61% decrease from 2024.

The company’s credit and structuring operations grew earnings by 6% to R2.27 billion, driven by continued strong growth in India and a solid contribution from Sanlam’s South African structuring.

Sanlam further reported strong new business growth, with net client cash flows in this division reaching R127 billion (up 135.19%) and new business volumes reaching R496 billion (up 18.1%).

On the back of these results, Sanlam declared a dividend of 485 cents per share, a 9% increase from 2024’s payout.