The man running South Africa’s biggest insurer

Paul Hanratty was thrown into the deep end as Sanlam CEO, taking over the helm of Africa’s largest insurer just before the COVID-19 pandemic was about to sweep through the country. 

The company would take a hit of R22 billion in mortality claims in a single year while it tried to expand its footprint across Africa and India. 

Praising Sanlam’s historic conservatism, Hanratty would go against the grain by accepting a unique pay package. 

When he was appointed Sanlam CEO in March 2020, Hanratty was awarded five million shares in the company that could be cashed out after five years. This was instead of the usual mix of salary, share awards, and bonuses. 

This was a major gamble for someone leading a company lauded for its conservative approach, which had ensured its survival for over a century. 

But for someone who had spent his life studying risk, this move from Hanratty was calculated. His contract ensures that 10% of his final payout is guaranteed, and to this end, he is paid a set amount of R6.13 million in cash every year for five years.

At current share price levels, the five million shares now have a maximum value of around R421 million.

Born in 1961, Hanratty is an Irish national but has spent much of his time in South Africa working for local insurance giants. 

Hanratty joined Old Mutual in 1984 after graduating with a Bachelor of Business Science, specialising in Actuarial Science, from the University of Cape Town. 

Without wasting much time, he completed the necessary qualifications to become an actuary and became a Fellow of the Institute of Actuaries (FIA) in 1987. 

Hanratty made rapid progress through the ranks at Old Mutual, rising to become CEO of Old Mutual South Africa in 2006. 

Unafraid to take bold action, Hanratty moved the company’s head office from Pinelands in Cape Town to Sandton—a move that Old Mutual employees had fiercely resisted. 

As CEO, he helped the organisation navigate the global financial crisis and strongly developed Old Mutual’s presence in the rest of Africa.

Hanratty also decentralised the monolithic Old Mutual Asset Managers to a range of self-contained boutiques.

In 2009, he assumed a broader role within Old Mutual plc, based in London, with responsibility for the company’s insurance and asset management businesses in the US, UK, Scandinavia, Europe, South Africa, and other emerging markets.

Hanratty continued his upward march, being appointed Chief Operating Officer (COO) of Old Mutual in 2011 and joined the board in 2013 as Group COO in 2013. 

Crucially, Hanratty gained experience outside of insurance, serving on the board of Nedbank as Old Mutual owned a significant portion of the bank’s shares. 

He looked destined to rise to become CEO of the insurer. However, the next few years of Hanratty’s career would end up with him being one of the very few to cross the border between the traditionally ‘English’ Old Mutual and ‘Afrikaans’ Sanlam. 

Hanratty lost out to a shock outsider for the CEO job. Former Liberty CEO Bruce Hemphill took over at the helm of Old Mutual in 2015, beating out Hanratty due to his wider experience in running banks and asset managers.  

Before Hemphill could take over as CEO, Hanratty resigned as COO and refused to stay on while the former was charged with breaking the insurance giant into its African and Western businesses. 

This led to the formation of, amongst others, UK-based asset manager Quilter and Old Mutual Limited. 

Hanratty had dedicated over 30 years of his life to Old Mutual and faced stiff criticism from the press. The Evening Standard said that he was better off out of the insurance game, “improving his golf swing.”

The former Old Mutual lifer spent considerable time outside of the game before emerging as a potential CEO candidate for Sanlam five years later. 

Sanlam’s board did not waste any time in snapping up an experienced executive from its chief competitor, with Hanratty becoming a director at the company after his term of restrain ended in 2017. 

While his predecessor Ian Kirk, was reluctant to handover the reins to Hanratty at the height of the COVID-19 pandemic, Sanlam’s board had no such qualms. 

Hanratty was appointed CEO in March 2020, with Kirk fully relinquishing the helm at the end of that year. 

Despite dealing with the fallout of the pandemic, Hanratty also took on a massively complex company that had recently expanded into India and Malaysia and deepened its presence in Africa. 

This expansion came at a time when some of its rivals, including Liberty, changed their focus towards South Africa. Old Mutual, which had mainly expanded to developed markets, returned to its roots in 2018, ending its London listing of almost two decades.

As a vote of confidence in his own abilities and the company’s direction, Hanratty accepted an unusual pay package of five million Sanlam shares that could be cashed out after five years. 

While bold, Hanratty stood to gain massively if the company hit its stated performance targets. When issued to him, the shares were valued at around R250 million. 

Things did not get off to a great start for Hanratty as he had to forfeit some of the five million shares after the company failed to meet annual performance targets. Around 98,000 shares were forfeited in 2023 and a further 144,023 in 2024. 

The Sanlam CEO is judged according to various targets, including new business, share price performance, profitability, transformation and sustainability, return on capital, cost efficiencies, leadership and governance and risk management.

He’s also meant to focus on reshaping Sanlam through mergers and acquisitions, modernising the company’s technology, and bolstering the insurer’s competitive position in South Africa. 

Hanratty’s five-year deal was structured to align his interests more closely with shareholders, according to Sanlam, and 90% of it is at risk after his annual cash payouts are taken into consideration.

In total, Hanratty now has about 4.76 million shares – worth around R421 million – due to him, but further forfeitures in 2024 and 2025 are possible.

However, this is unlikely as the insurer has performed extremely well in the aftermath of the pandemic, and Hanratty is beginning to reshape Sanlam through lucrative deals. 

Sanlam’s market capitalisation has surged more than R50 billion since he took over the top job. It is now valued at more than R185 billion and is Africa’s largest non-bank financial institution. 

Hanratty has overseen the formation of SanlamAllianz, a joint venture with Europe’s largest insurer, Allianz. 

This partnership combines the two groups’ operations across eight of Africa’s largest markets, providing Sanlam with a long-sought entry into Egypt’s insurance sector. Sanlam has a 60% stake in the joint venture.

As CEO, he has also seen Sanlam take a 60% stake in health insurer AfroCentric, buyout BrightRock, and integrate part of Absa’s asset management business into Sanlam’s to create an R1 trillion asset manager. 

Sanlam has also completed the takeover of Assupol in a deal worth R6.5 billion during Hanratty’s tenure to strengthen its position in the entry-level insurance market. 

The company has also deepened its presence in India, taking its effective shareholding in Shriram life and general insurance to over 50%. 

Sanlam snapped up MultiChoice’s insurance business, NMS Insurance Services, for R1.2 billion in the middle of 2024. 

More recently, Hanratty sealed a deal with Ninety One to make the asset manager the primary active investment manager for its local and global products.

As part of this, Ninety One will buy Sanlam’s active investment management business, Sanlam Investment Management Proprietary. Sanlam will also appoint Ninety One as the investment manager for its UK business. 

These two businesses have a combined R400 billion in assets under management, which will be moved to Ninety One. 

In exchange, Sanlam will receive a 12.3% equity stake in Ninety One through a combination of Ninety One Limited and Ninety One plc shares. In effect, Sanlam will become one of the largest shareholders in Ninety One.