Sanlam’s 2025 annual results triggered a negative market reaction after headline earnings declined, but a closer look at the performance of the group’s operating divisions suggests that underlying activity across much of the business remained relatively resilient.
During the results presentation on 12 March, chief financial officer Abigail Mukhuba (pictured) outlined how Sanlam’s core business clusters performed during the year. These include Life and Health, General Insurance, Investment Management, and Credit and Structuring – the divisions that generate most of the group’s operating income across South Africa, the rest of Africa, and India.
Although the headline figures were affected by investment variances, foreign exchange movements, and restructuring costs, Mukhuba said the group delivered a net result from financial services (NRFFS) of R15.9 billion, a 3% increase on an actual basis and about 20% growth on a normalised basis.
The divisional breakdown presented during the results briefing provides insight into where that growth originated.
Life and Health: stable earnings despite structural pressures
Sanlam’s Life and Health division remained the group’s largest contributor to earnings.
According to Mukhuba, the segment generated NRFFS of about R9.3bn in 2025, broadly stable compared with the previous year on a reported basis but 25% higher on a normalised basis after adjusting for prior-year once-off effects.
New business volumes in the division increased to R99.3bn in present value of new business premiums, while net client cash flows more than doubled to about R36bn.
Mukhuba said the earnings performance was supported by favourable mortality experience and stronger asset-based fee income, particularly in South Africa’s savings and annuity products.
She added that growth in corporate and market-linked annuity sales helped to offset weaker flows in traditional life annuity products.
However, the division’s value of new business declined by about 21%, reflecting a shift in product mix and the so-called “J-curve” effect associated with investments in expanding life-insurance distribution in India.
The division has also experienced structural change following the loss of the Bonitas medical scheme administration contract.
The contract was awarded to Momentum Health after a request-for-proposals process in 2025. The procurement decision has since become the subject of litigation involving Medscheme, the scheme’s former administrator.
Read: Bonitas-Medscheme court battle stalls as application removed from urgent roll
The dispute has also raised concerns about employment in the healthcare administration sector.
In comments reported by News24, Sanlam chief executive Paul Hanratty said the loss of the Bonitas mandate could place about 5 000 jobs at risk at Medscheme, which is owned by Sanlam through AfroCentric.
Hanratty said the administrator has built substantial operational capacity around the Bonitas contract over decades, and a rapid transition could have serious implications if staff could not be redeployed.
At the same time, he suggested the issue has attracted disproportionate attention relative to its financial importance for the group, indicating that the loss of the contract represented only a small component of Sanlam’s overall earnings base.
General Insurance: Santam’s performance offsets pan-African volatility
Sanlam’s General Insurance segment reported improved profitability, driven primarily by Santam’s underwriting performance.
Mukhuba said the segment delivered NRFFS of R3.6bn, representing 17% growth year-on-year.
Net earned premiums increased to R40bn, up from R33.4bn in 2024, reflecting premium growth across several insurance lines.
The strong result was largely attributable to Santam, where underwriting margins benefited from favourable attritional claims experience and fewer large weather-related losses.
Read: Santam underwriting surge lifts profitability well above targets
However, Mukhuba said performance in the pan-African insurance operations was weaker.
Higher tax settlements, increased tax provisions, and elevated mid-sized corporate claims weighed on earnings in that segment, although she said the overall net insurance margin remained within the group’s target range.
The year also marked an important strategic development for Santam with the launch of Santam Syndicate 1918 at Lloyd’s of London, which began underwriting risks on 1 January 2026.
The syndicate allows Santam to participate in international specialty insurance markets and diversify its underwriting exposure beyond South Africa.
Management expects the business to scale gradually as the underwriting portfolio grows.
Investment Management: asset growth and structural change
Sanlam’s Investment Management division produced steady earnings growth.
Mukhuba said the segment generated NRFFS of about R1.5bn, representing 7% growth on an actual basis and about 14% on a normalised basis.
Assets under management within Sanlam Investments reached roughly R1.7 trillion by the end of the year, supported by net client inflows and market movements.
The division recorded net client cash inflows of about R67bn, driven largely by flows into South African multi-manager, indexation, and collective investment products.
Mukhuba said fee income from these businesses remained robust despite some repricing pressures on the Glacier investment platform.
The year also saw progress in Sanlam’s restructuring of its relationship with Ninety One, the global asset manager that was previously part of the group.
Sanlam reduced its direct ownership in the business while retaining a strategic shareholding. As part of the transaction, nearly R400bn in assets under management will transfer to Ninety One during 2026.
Management said the restructuring forms part of a broader effort to simplify Sanlam’s structure and redeploy capital into higher-growth opportunities.
Credit and Structuring: India drives expansion
Sanlam’s Credit and Structuring segment continued to expand, particularly through its participation in the Shriram financial services ecosystem in India.
The division reported NRFFS of about R2.3bn, representing 6% growth on an actual basis and 15% on a normalised basis.
Loan growth remained strong in India, where the Shriram Finance credit book expanded to about R619bn, supported by expanding branch networks and growing demand for retail and commercial credit.
Mukhuba said the Indian business delivered solid earnings growth, but profitability was partially offset by the costs of expanding branch infrastructure and building scale in the market.
South Africa also contributed to the division’s performance through structuring activities, although earnings were partly affected by higher credit-loss provisions in the personal loans business.
A changing reporting framework
Mukhuba also cautioned that some of the headline numbers in the 2025 results should be interpreted in the context of Sanlam’s evolving financial reporting framework, which is being aligned more closely with the requirements of IFRS 17.
The group has historically used NRFFS as its primary earnings measure. However, under the revised framework, Sanlam will increasingly emphasise operating profit and adjusted headline earnings as its main reporting metrics.
According to the results presentation, Sanlam reported NRFFS of R15.9bn in 2025, while adjusted headline earnings amounted to about R17.1bn, reflecting a different way of recognising investment returns and market movements.
The new framework will also allow investment market movements to flow more directly through reported operating profit, which could result in greater year-to-year volatility in earnings.
At the same time, Sanlam indicated that investment variances will continue to be smoothed for dividend purposes, meaning that fluctuations in reported earnings will not automatically translate into changes in dividend payouts.
Management said the revised reporting structure is intended to provide a clearer link between operating performance, capital allocation, and shareholder returns as the group continues implementing its Vision 2030 growth strategy.
Way forward: growth platform largely in place
Looking ahead, Hanratty said Sanlam enters 2026 with a clearer strategic structure following several years of portfolio restructuring and investment.
Summarising the group’s position at the end of the results presentation, he said the company had delivered “a strong set of underlying results” despite geopolitical uncertainty, market volatility, and large currency movements.
Hanratty argued that Sanlam’s diversified portfolio across South Africa, Africa, and India had demonstrated resilience during a turbulent global environment.
“We enter 2026 with strong solvency, disciplined capital allocation, and a much clearer strategic structure following the portfolio repositioning that’s taken place over the last few years,” he said.
He indicated that the group expects continued growth in new business volumes, supported by favourable structural trends in its key markets and continued investment in distribution capacity.
India is expected to remain a major growth driver following the recent capital injection into the Shriram ecosystem, while the pan-African insurance platform is expected to shift its focus towards growth now that integration work has largely been completed.
Sanlam also plans to continue investing in several strategic initiatives, including the development of a banking and credit offering in partnership with GoTyme, the rollout of a group-wide rewards programme, the expansion of its Lloyd’s syndicate operations, and ongoing technology modernisation and cloud migration.
Hanratty cautioned that profit growth could moderate in the near term as the group continues investing in these growth platforms.
However, he said the strategy is designed to strengthen Sanlam’s long-term earnings base and position the group for sustained value creation.
“We believe the group remains very well positioned for sustainable long-term value creation for shareholders,” he said.
