Sanlam says it entered 2026 with strong operational momentum, reporting a sharp rise in new business volumes, and robust client inflows for the three months to 31 March, even as volatile markets, weather-related claims, and continued investment in growth initiatives put pressure on earnings and value metrics.
In an operational update released on 21 May, the group said new business volumes increased by 29% on a comparable basis, while net client cash flows rose by 45% to R38.6 billion, reflecting resilient demand across its life insurance and investment management businesses.
The group said the quarter reflected a continued shift in South Africa towards capital-light savings and investment solutions, particularly market-linked annuities, which supported strong cash generation and lower balance-sheet strain but reduced the value of new covered business margins in the short term.
Sanlam’s value of new business fell by 22% to a margin of 1.5%, while present value of new business premiums rose by 13%, underscoring the gap between strong sales volumes and weaker near-term value metrics.
Management said product and channel mix initiatives are under way and should support a gradual recovery in VNB momentum over the rest of the year. It expects VNB margins to remain constrained in the first half of 2026 before improving by year-end, helped by a higher proportion of risk business in South Africa and product redesign and repricing in India.
Life insurance and investment management were the main engines of growth. Life insurance new business premiums rose 13%, supported by strong performances in South Africa and Pan-Africa, while investment management benefited from higher asset-based fee income and strong inflows into the restructured asset management business.
Sanlam also said net client cash inflows increased by 92% on an actual basis, with particularly strong contributions from indexation (via Satrix) and wealth management in South Africa.
Pan-Africa also delivered a solid contribution, with new business volumes supported by single-premium unit-linked business in Morocco and deposit administration and credit life flows in Kenya.
Sanlam said Pan-Africa recorded a 20% increase in VNB on a comparable basis, driven by higher volumes and a continued focus on higher-margin risk products.
India, by contrast, remained a mixed picture: retail new business momentum stayed strong, but the loss of a large group credit life scheme and regulatory impacts led to negative VNB for the quarter.
General insurance was the weak spot, although this was already evident in Santam’s separate quarterly update.
Read: Flood and fire claims dent Santam’s underwriting performance
Sanlam said severe weather events across Southern Africa and Pan-Africa led to elevated catastrophe claims, including flooding in northern South Africa and wildfires in the Western Cape, as well as floods in Morocco and a cyclone in Madagascar. Those losses weighed on general insurance earnings and underwriting profits, although Santam’s underwriting margin remained above the midpoint of its target range of 5% to 10%.
At group level, operating profit rose 8% on a comparable basis, but only 2% on an actual reported basis after adjustments for currency and structural changes.
Sanlam said life insurance and health, investment management, and credit and structuring all grew on a comparable basis, while general insurance declined sharply because of claims pressure.
The group also recorded a positive investment variance of R467 million, helped by higher bond yields and narrowing long-dated bond spreads, partly offset by weaker equity market performance in Morocco and wider credit spreads in the credit portfolio.
The quarter reflected a busy period of corporate activity.
Sanlam’s discretionary capital fell to R3.2bn from R8.1bn at the end of December 2025 after it acquired additional interests in its India insurance businesses for a combined R4.8bn.
The group completed the South African leg of the Ninety One transaction, increased its stake in Shriram General Insurance and Shriram Life, and said MUFG’s capital injection into Shriram Finance should support growth across the Shriram ecosystem, although it diluted Sanlam’s effective shareholding in that business.
Sanlam said its capital position remains strong, with solvency cover within target ranges and solid liquidity. It also pointed to progress on its broader strategy, including the Assupol integration in South Africa, continued work towards launching banking services with GoTyme, migration to the cloud, and efforts to embed AI across the business to improve efficiency.
The Santam 1918 Syndicate at Lloyd’s is also expected to support future growth, although it will weigh on earnings in 2026.
Looking ahead, Sanlam said it expects resilient cash generation to continue through 2026, even as the operating environment remains volatile.
Management said it is taking targeted steps to ease pressure from weather-related claims, manage business mix, and reduce costs, while it expects earnings momentum to strengthen as claims normalise and new initiatives gain traction.
