Sanlam Group reported strong growth and operational performance in its 2025 interim results despite a challenging operating environment.
Image: Michael Pinyana.
.In a year marked by geopolitical tensions and market uncertainties, Sanlam has reported strong growth and operating performance in the year to December 31, but it warned that headline earnings per share will decline between 25% and 15%.
The share price slipped 3% to R97.63 by Thursday afternoon, after the release of the operating update by the life insurance and financial services group. It warned that headline earnings per share (HEPS) will decline from 964 cents to a range of 723 to 819 cents in the 2025 financial year.
HEPS contracted largely due to corporate activity and structural changes in 2024 and 2025, as well as negative investment variances in 2025, primarily driven by unfavourable movements at the long end of the yield curve compared to the strong gains recorded in 2024.
Notwithstanding lower headline earnings, discretionary capital has increased significantly, reflecting a disciplined approach to enhancing balance-sheet flexibility and funding growth.
A record annual performance in group new business volumes was driven by robust flows into its South African asset management operation. The group delivered strong underlying operational performance for the year, with positive contributions from the general insurance, investment management, and credit and structuring businesses.
The life insurance segment experienced significant growth, particularly in corporate and market-linked/living annuity sales, despite facing challenges in life annuity sales due to declining bond yields.
The life and health business delivered strong underlying growth, supported by favourable mortality experience, improved persistency, and higher asset-based fee income.
Underwriting experience was positive across the group's South Africa and India general insurance operations, supported by lower claims, partly offset by higher claims in the Pan-African general insurance operations.
The company has consolidated its platforms and strengthened its operating model across key markets over the past five years, making the business more scalable and resilient. This strategy has allowed Sanlam to navigate complexities and capitalise on emerging opportunities.
In financial terms, the expected actual and normalised results for the year indicate a strong upward trajectory in new business volumes, with group new business volumes expected to increase by 18% and life new business volumes by 10%. Net client cash flows have more than doubled, showcasing strong contributions across all lines of business.
However, the value of new business (VNB) is expected to decrease by 21%, primarily due to a shift in product mix in South Africa and the cessation of the Capitec partnership.
Sanlam is expected to release its results on March 12, 2026. The group will transition to a new financial reporting framework effective from 1 January 2026, which aims to enhance transparency and provide a clearer picture of its operational performance.
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