Sanlam’s annual profit up 24%

SANLAM reported a 24 percent rise in annual profit yesterday and declared a dividend, as the insurer benefited from the absence of hefty one-off charges that marred its results last year.

The country’s largest insurer had already flagged an increase in headline earnings per share (Heps) of up to 29 percent. That stood at 448.5 cents in the year to December 31, 2020, the first full-year report under new chief executive Paul Hanratty, who joined in July.

Its rising Heps was out of step with other financial services firms, all of which have reported declining profit due to the impact of Covid-19.

Sanlam said the crisis had generated one of the “most challenging periods” for the group since its listing more than 20 years ago.

Other underlying metrics did suffer, with its measure of operating profit falling 23 percent and its basic earnings per share plunging 60 percent. This was largely due to an already-flagged R726 million credit impairment provision related to government bonds and banking exposure in Lebanon, as well as a R7.8 billion charge announced in the first half that was related to an acquisition.

Covid-19 had an impact of more than R2bn on its business, it said, spanning excess claims – largely mitigated through the release of reserves set aside in 2020 – credit provisions and the impact on markets.

But it reported a 25 percent rise in new business volumes, driven by its growing businesses outside of South Africa, and said it had not seen the expected increase in clients cutting policies, although this could change.

It declared a dividend of 300c per share – 10 percent lower than last year’s dividend.