Sanlam has delivered a strong start to 2025, with significant growth in earnings and new business volumes. General insurance and investment management excelled, while life insurance showed steady normalised growth, an operational update for the first three months of the year shows.
The group reported a 15% increase in group new business volumes for the first quarter. This growth was even higher, at 17%, on a normalised basis, which adjusts for structural changes and currency fluctuations, a SENS announcement of 15 May said.
The life insurance segment saw a 4% increase in new business volumes when normalised, despite a 3% decline in actual terms because of structural changes, such as the termination of the joint venture with Capitec in October 2024 and the sale of Sanlam Life Namibia to SanlamAllianz in July 2024.
The value of new business for life insurance also grew by 4% on a normalised basis, although it decreased by 20% in actual terms because of these structural adjustments and a shift in the product mix towards less capital-intensive market-linked annuity products.
Net earned premiums from general insurance surged by 13%, with notable contributions from Santam in South Africa and strong growth in Asia, particularly in India’s motor vehicle third-party business, which grew by 30%.
Investment management new business volumes also performed well, increasing by 21%, driven by strong inflows across all regions.
The group’s net client cash flows more than doubled to over R20 billion. This growth was supported by substantial contributions across all regions and business lines.
Financial performance
The net result from financial services (NRFFS) and cash NRFFS both increased by 15% (18% in constant currency terms). Net operational earnings rose by 22% (26% in constant currency).
General insurance led the growth, with a 49% increase in NRFFS (56% normalised), driven by excellent performance from Santam and robust earnings growth in India.
Investment management recorded a 16% growth in NRFFS, benefiting from fund establishment fees in the alternatives business, strong performance in Satrix, and higher brokerage income in the private wealth business.
The life insurance and health lines of business achieved a 7% growth in NRFFS, supported by satisfactory performance in South Africa and improved earnings in Malaysia, although tempered by weaker results in India because of investments in distribution channels.
Credit and structuring saw a 6% increase in NRFFS (21% normalised), driven by strong growth in Shriram Finance Limited in India and a solid performance in South Africa’s structuring business.
Key transactions
Sanlam engaged in several strategic transactions during and after the first quarter of this year to strengthen its portfolio and market position:
- Effective 2 May, Santam acquired 60% of NMS Insurance Services (SA) Limited from Sanlam Life for R925 million, enhancing its insurance capabilities.
- On 7 April, Allianz Europe BV acquired an 8.59% stake in SanlamAllianz for R4.5bn, resulting in a 51% Sanlam and 49% Allianz ownership split.
- Sanlam increased its effective economic shareholding in Shriram Wealth from 26% to 49.7% and in Shriram Asset Management Company from 16.3% to 35.5%, with a combined capital outlay of R700m funded from discretionary capital.
- In April, Ninety One Limited and Plc shareholders approved a long-term asset management relationship, set for completion later in the year.
The group said it has made good progress with the integration of Assupol, acquired in 2024, consolidating adviser forces and support functions into Sanlam.
Sanlam’s discretionary capital increased to R4.7bn by 31 March, and further to R9.7bn by 14 May, after adjusting for post-reporting period transactions. About R5bn is ringfenced for pending Shriram insurance and stockbroking transactions, reflecting the group’s strategic focus on growth opportunities.
Outlook
Sanlam maintains a cautious outlook for the remainder of 2025 because of escalating global geopolitical tensions and the potential for increased tariffs.
The group is particularly concerned about the risks of a recession in the United States, which could negatively impact South Africa, Pan-Africa, and Asia, leading to reduced new business, lower premiums, and deteriorations in persistency.
Additionally, increased tariffs could drive inflation and supply chain disruptions, raising general insurance claims costs and lowering underwriting margins. The group also anticipates potential challenges from lower asset fees, higher inflation, reduced persistency, and increased credit defaults.
Given these uncertainties, Sanlam has decided to maintain a significant discretionary capital buffer above its normal target range to safeguard against potential market disruptions.
The group believes it is too early to update its earnings guidance, citing the difficulty in forecasting the economic impacts of ongoing tariff disputes and geopolitical developments.
