Sanlam's businesses perform well in the first half and return on equity value is strong

Sanlam’s strong annualised return on group equity value of 18.2% for the six months to June 30 was well above its 14.7% hurdle rate and reflects strong value creation from high levels of new business and positive experience variances.

The results were achieved in a challenging operating environment marked by global trade tensions and shifting investor sentiment. Group earnings, the net result from financial services, increased by 15% per share, demonstrating satisfactory performance across all operations.

“The balance sheet remains healthy, our operating businesses all have tremendous momentum, and we continue to gain market share,” Sanlam Group CEO Paul Hanratty said in an online presentation.

New business volumes increased by 7% in a challenging economic environment for customers, reflecting the benefit of the group’s diversified portfolio.

The South Africa business showed “really excellent results,” with life insurance bolstered by the Assupol acquisition, good profits reported at Assupol, and strong growth in the investment businesses and in Santam, he said.

Net client cash flow was positive; net inflows more than doubled to R48.5 billion, indicating attractive investment propositions and improved retention.

Discretionary capital ended the period at R9.2bn, on top of an already strong solvency position, although R5bn was earmarked for the India insurance transactions that were awaiting regulatory approval. The group still considered it prudent to maintain capital buffers ahead of its target range.

“We are pleased with Sanlam’s performance, which has been achieved against the backdrop of a turbulent global operating environment in the first six months of the year,” said Hanratty.

He said they were positive about continued “excellent results for the full financial year.”

In South Africa, the integration of Assupol had progressed well, with the retail mass segment now operating as one business, with one strategy, and with employee and agent harmonisation, said Hanratty.

Medium-term synergy projects had commenced. The advisor force was reduced by 17%, but productivity had improved 23%, and 95% of the Assupol advisor force were now Sanlam employees, he said.

Santam completed the transaction to acquire 60% of NMS Insurance Services South Africa from Sanlam Life for R925 million, effective on 2 May 2025.

In Pan-Africa operations, SanlamAllianz continued to integrate operations and realise revenue and cost synergies. Six out of 11 overlapping operations had been integrated into SanlamAllianz.

On April 7, 2025, Allianz Europe concluded the acquisition of 8.59% in SanlamAllianz for R4.5bn initially, resulting in a final shareholding split in SanlamAllianz of 51% Sanlam and 49% Allianz.

In Asia, Shriram’s reach in the Indian finance market and wide presence in underserved areas offered “immense potential” to drive insurance growth and financial inclusion.

Sanlam completed its subscription for additional shares in Shriram Wealth, increasing its shareholding to 49.7% from 26%. Regulatory approvals were awaited in India. Shriram demonstrated sustained earnings growth, partially offset by branch expansion and higher costs.

On June 16, the UK component of the Ninety One transaction concluded, with Sanlam Investments UK transferring £1.9bn in assets under management to Ninety One.

After the reporting period, on July 23, the in-principle approval from the Lloyd’s Council was received to launch a Santam syndicate, subject to meeting the start-up operational requirements of Lloyd’s. This aims to enhance Santam’s international growth and diversification ambition.

On July 30, the Competition Tribunal approved the credit joint venture between Sanlam Personal Loans and Tymebank. The transaction awaits approval from the Prudential Authority in South Africa.

The transaction to acquire the shares in Shriram Insights Stockbrokers for R206m became effective on August 22, 2025, increasing the group’s shareholding to 40.7% from 26%.

“Sanlam’s diversified product portfolio, strong capital position, and disciplined risk management enable the group to deliver sustainable growth.

The ongoing investments in technology and distribution channels would support growth in South Africa, Pan-Africa, and Asia. Management expected continued demand for Sanlam’s solutions driven by demographic trends and evolving consumer needs.

Hanratty said in the second half they would work on the remaining integration across Africa in SanlamAllianz, concluding the Ninety One transaction with the necessary approvals, finalising the Lloyd’s transaction in Santam to get the business up at the end of next year, and awaiting regulatory approvals in India. Sales growth and the value of new business growth were expected to be better than in the first half.

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