Sanlam Expands African Footprint

The insurer remains committed to strengthening and growing their portfolio on the continent.

- Marcia Klein

Africa is a continent rich with expansion opportunities that are often accompanied by poor returns. Expansion on the continent does, however, remain at the core of the strategies of some major South African companies, possibly because they have an established presence there and need to try to make it work; or possibly because they believe in Africa’s well-documented growth potential, despite the significant hurdles.

Looking at the experience of companies such as MTN and Shoprite, this strategy is not without its risks, but it remains core to Sanlam’s strategy, which was reiterated when it reported results for the year to end-December 2020 in mid-March.

Reflecting the full effect of the pandemic and lockdown, its net result from financial services declined by 13%, but would have been up 17% excluding the impact of Covid-19. Net operational earnings decreased by 23%, although headline earnings increased 24%.

Earnings were affected by the extent of business continuity claims at short-term insurance subsidiary Santam, offset by lower motor claims, as well as increased mortality claims, doubtful debt provisions, and the provision of relief to clients and intermediaries.

Remarkably, new business volumes were up by 25% to R311bn with a strong growth at Sanlam Investment Group and Sanlam Emerging Markets, which operates predominantly in Africa and has investments in India and Malaysia too.

Emerging markets