Financial services group Sanlam is confident about its ability to withstand current global geopolitical risks, group CEO Paul Hanratty says. This is as SA’s largest insurer reported a 15% increase in new business volumes in its life insurance business.
Sanlam reported in its operational update for the quarter to end-March that group net client cash inflows improved by 14% to R8.8bn, while net operational earnings benefited from improved investment return, registering a 15% growth.
Hanratty said while risks remained, the company was in a good position to withstand headwinds that come with uncertain global geopolitics, which has seen war break out between Russia and Ukraine and Israel and Hamas.
“Globally, inflation and interest rates remain stubbornly high but we remain insulated from the effect of this, and will benefit from the eventual normalisation of these macro variables,” Hanratty said.
“While we remain concerned about the risks posed by global geopolitics, our balance sheet is resilient against macro shocks and our people show the greatest commitment to deliver results. Our group earnings, however, remain sensitive to significant moves in global investment market levels.”
Strategy
Sanlam’s three-pronged strategy is to grow its dominance in its home market, expand in the rest of the continent and build a scalable nonbanking financial institution in India.
To this end, Sanlam last year acquired a 60% stake in health insurer AfroCentric, added Capital Legacy to provide wills and estate services to local clients and completed the buyout of the remaining shareholders in insurer BrightRock.
There was also the tie-up of its local investment management business with Absa, which created an asset manager with R1-trillion in assets.
The group last year announced a joint venture — SanlamAllianz — with Europe’s largest insurer, Allianz, that will pool most of their businesses on the continent to create a financial services partnership worth about R35bn.
The company earlier this year also bought Assupol for R6.5bn in a deal that is still subject to requisite approvals.
The group has also increased its presence in India.
Sanlam said in the three months under review its life insurance business reported “satisfactory growth”, boosted by strong sales in SA and Asia. The general insurance business also registered good growth, with SA and Asia again making a strong showing.
The group said it was satisfied by the performance of SanlamAllianz and most other markets, which recorded good growth in the period, “though dampened by underperformance in Côte d’Ivoire”.
“We are pleased with the positive performance across our business, despite a challenging backdrop. The performance is underpinned by the commitment of our people and the diversity of our operations by product, market segment and geography, coupled with excellent cash generation and the group’s solid capital base,” Hanratty said.
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