Sanlam weathers rand turmoil, new business up 20%
SANLAM Emerging Markets recorded overall new business growth of 20 percent, with structural growth more than offsetting the negative impact of a stronger average rand exchange rate.
This is according to the insurer’s operational update released yesterday where it reported a rise in profit in the four months to April. Sanlam said economic conditions in Namibia were placing pressure on new business performance, with overall new business volumes in line with last year. Namibia also experienced a change in mix from individual life business to the less profitable group life line of business. Annuity sales in Botswana declined significantly during the period, the combined effect of a reduction in the value of retirement funds becoming available as well as competitive pressures. Sanlam’s normalised headline earnings a share increased by 9 percent compared with the first four months of the 2016 financial year. The insurer said a relatively stronger investment market performance this year supported investment return earned on the capital base.
Diluted headline earnings a share, which include fund transfers recognised in respect of Sanlam shares held in policyholder portfolios, increased by 15 percent compared with the first four months of the 2016 financial year.
New business volumes declined by 4 percent to R71 billion largely due to lower lumpsum inflows at Glacier, Sanlam Investments Retail and Sanlam Private Wealth. Sanlam Personal Finance achieved strong growth in the more profitable recurring premium risk business lines. However, the insurer said this more than offset a decline in discretionary single premium business in the mass affluent market, as investor risk aversion remain elevated in the uncertain political and economic environment.
Overall new business sales at Sanlam Personal Finance declined by 10 percent as a result. Sanlam Sky new business sales increased by 27 percent in the comparable 2016 period. The change in mix towards risk business continued to yield positive results, contributing to 18 percent growth in Sanlam Sky’s individual life risk business sales. Sales of savings products declined by 49 percent. Sanlam shares rose 0.26 percent on the JSE yesterday to close at R65.89.
Santam Sanlam head office north of Johannesburg.