Sanlam riding high

Sanlam reported strong results for the six months through June 2024, as strong trading performances across all its businesses boosted the insurer’s earnings.

In its interim results released on Thursday, Sanlam said its earnings momentum continued, growing net result from financial services (NRFFS) by 14%. 

Sanlam’s life and health insurance operations grew NRFFS by 14%, general insurance reported a 16% rise, investment management performance was satisfactory with 10% growth, and the group’s credit and structuring operations recorded growth of 9%. 

NRFFS per share increased by 19% due to a lower adjusted weighted average number of shares in 2024 relative to 2023.

Sanlam’s net operational earnings increased by 8% to R8.1 billion, underpinned by the strong performance in NRFFS and a decline in project expenses. 

The lower growth rate relative to NRFFS is due to a lower investment return on shareholder capital of R1.2 billion, compared to R1.5 billion in 2023, largely attributable to foreign exchange movements.

This saw Sanlam’s headline earnings per share increase by 40%. The insurer said headline earnings grew more than NTFFS due to positive movements in shareholders’ fund reserves, including the acceleration of profit recognition of the Capitec funeral JV reinsurance recapture fee, which is excluded from NRFFS and cash NRFFS.

Sanlam’s total new business volumes were also strong for the first six months of 2024, at R204 billion. 

Growth was underpinned by the life insurance operations, growing sales by 15%. Life insurance new business volumes were strong across all regions. 

The net value of new covered business increased by 10%, with a net new business margin of 2.73%. 

Sanlam said its strong asset-gathering ability resulted in net client cash flows more than doubling to R24 billion, with all lines of business recording positive net flows.

The insurer’s group equity value (GEV) per share was R73.41 on 30 June 2024. Return on GEV (RoGEV) per share was 9.3%, ahead of the hurdle rate of 7.5%.

Positive contributors to RoGEV were the strong value of new business, risk experience, working capital and credit spread experience in the life insurance operations and in the nonlife operations, higher valuation of Sanlam’s Indian credit business due to improved

performance and outlook, strong operating results from Santam, and cost efficiencies in the South Africa asset management operations.

Sanlam’s solvency position also remained strong and well within target ranges, with a group solvency cover ratio of 166% as of 30 June 2024.