Sanlam, SA’s most valuable insurance group, has decried the forecasting uncertainty created by the back-and-forth discussions on increases to tariffs, with the company saying it is difficult to accurately predict the likely effects on the group.
The company, worth R184bn on the JSE, has listed geopolitical risks and potential increases to tariffs as the biggest risks facing the group this year.
Reflecting on Sanlam’s performance for the quarter ended March — which saw the company report growth in new business volumes of 15%, on Thursday — CEO Paul Hanratty said the group remained concerned about potential increases in tariffs.
“While we are pleased with the performance across all business lines, we are concerned about more serious and long ranging impacts arising from the tariff policies. It is too early to provide any meaningful update to our earnings considering the uncertainties regarding the impacts of the tariff disputes,” Hanratty said.
US President Donald Trump’s “Liberation Day” tariffs at the beginning of last month spooked global markets. The Trump administration announced the imposition of new tariffs on virtually all its trading partners, including SA and most African countries.
The tariffs, which have since been suspended for 90 days, all but nullified the African Growth and Opportunity Act (Agoa), which comes up for renewal in September.
According to data from Boston Consulting Group, trade with the US makes up about 13% of SA exports, and that nonrenewal of Agoa ends duty-free status for 25% of SA exports to the US, which is projected to dent exports by $397m.
President Cyril Ramaphosa and his delegation will head to Washington next week to try to smooth relations with the US.
In the quarter under review, Sanlam reported a 15% increase in earnings, excluding investment return on shareholder funds, while net operational earnings, including investment returns on shareholder funds, increased 22%.
The group said the integration of its recent acquisition, Assupol, was going as planned.
“The group continues to focus on strategic delivery, making good progress on Assupol’s integration into Sanlam. Management has progressed well in consolidating the Assupol adviser force into the Sanlam adviser force as well as consolidating support functions,” it said.
Last year Sanlam jumped the final competition hurdle in its R6.5bn acquisition of Assupol, as the group sharpened its strategy to build a fortress position in SA while looking to expand on the rest of the continent and in India.
The group was also awaiting regulatory approvals for the deal wherein Ninety One would become Sanlam’s active asset management partner.
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