Sanlam Group has announced a strong set of operational and financial results

In an operational update released today, the Sanlam Group has announced a strong set of operational and financial results for the 10 months to 31 October 2013.

The Sanlam Group reported that its performance for the period was bolstered, among others, by significant improvements in investment market returns since the end of June 2013, despite periods of volatility caused by concerns about a tapering of Quantitative Easing by the United States Federal Reserve in the case of the investment market. Generally operating and competitive markets conditions also remained challenging.

The Sanlam Group reported that its operating results include maiden contributions from the Sanlam Group’s increased holding in Shriram Capital in India, the acquisition of a 49% stake in Pacific & Orient in Malaysia during May 2013 and the equity-accounted earnings of Capricorn Investment Holdings (CIH), following an increase in the Group’s interest in CIH to a strategic stake of 22% with effect from 1 July 2013. CIH is the Group’s insurance partner in Namibia and also the holding company of Bank Windhoek.

Sanlam Personal Finance (SPF) recorded a 33% increase in new business sales. Entry level new business in South Africa increased by 24% while the Middle Income volumes increased by 15%, with a continuance of strong growth in single premium business; and the Affluent market sales increased by some 40%.

Excluding Capricorn Unit Trust in which the Group has disposed of its interest, Sanlam Emerging Markets’ (SEM) new business volumes increased by 18% on the first 10 months of 2012, supported by good growth in the Rest of Africa’s contribution as well as in Shriram General Insurance’s net earned premiums.

Sanlam Investments (SI) increased its new business volumes by 35%, with Wealth Management, Investment Services and International operations achieving strong growth in excess of 50%.

Commenting on the results, Sanlam Group Chief Executive, Dr Johan van Zyl said that he was pleased with the overall operational performance for the 10 months to 31 October 2013. "We are satisfied with our operational performance across the businesses as well as the Investment market performance, which has supported Group earnings since the end of June.

"The results of SPF’s focus on quality and profitable new business are evident in the cluster’s consistent performance despite the challenging and competitive environment, especially in the entry level market".

"Investments by SEM in emerging markets in the past year or so contributed to a significant increase in earnings. We will continue to work closely with our partners across Africa, India and South-East Asia to grow these businesses,” Dr Van Zyl said.

Santam’s underwriting performance improved since June 2013 to the end of October but the severity of claims experienced continues to impact on its operating earnings growth.

Sanlam’s available discretionary capital amounted to some R3 billion after the acquisition of an additional interest in Shriram Transport Finance Company for some R200 million and increasing the Group’s stake in CIH to 22% for R243 million earlier this year. The discretionary capital remains earmarked for growth opportunities mainly in Africa and South-East Asia.

"We believe sustained commitment and focus on our strategy and the businesses we are building outside South Africa continue to yield a positive result. Although we expect general trading conditions to remain challenging for the rest of the year, we are confident that we have the resilience and the requisite depth of skills and experience to withstand the challenges,” Dr Van Zyl concluded.