Sanlam reports solid 4-month performance
The giant insurer said the value of new life business increased by 13% in 2013 on a comparable economic basis with overall net fund inflows (excluding white label) of R10.7bn achieved, compared to R9.4bn in the comparable four-month period in 2013.
Sanlam Group Chief Executive, Dr Johan van Zyl, said the Group was satisfied with the performance of all its businesses. "We are pleased that we have achieved good growth across the businesses and we believe our strategy of diversification across products, market segments and geographies is contributing to our solid performance. Going forward, this will remain a key part of our strategy" said Dr Van Zyl.
All business clusters performed well with Santam's underwriting performance experiencing significant improvement compared to the first four months of 2013. This was mainly driven by a turnaround in the crop insurance business during the period and the impact of corrective action taken in the intermediated business units.
Sanlam Personal Finance reported a 26% increase in new business sales with individual recurring premium business reflecting satisfactory growth despite the major impact of industrial action in the platinum sector on sales of Sanlam Sky's Rustenburg branch.
Single premiums continued to perform well, with strong growth at both the Individual Life middle-income market and Glacier
Sanlam Emerging Markets achieved sterling new business growth of 58%, excluding the discontinued Capricorn Unit Trust business, which was sold as part of the CIH transaction in 2013. All regions contributed growth in excess of 40%. Excluding the maiden contribution from Pacific & Orient, new business volumes grew by 47%.
Sanlam Investments achieved net new business flows of R2.1bn in a very competitive market, somewhat down on 2013 essentially due to the loss of a few low margin mandates.
The Group's available discretionary capital amounts to some R3bn, which remains earmarked for growth opportunities mainly in Africa and South-East Asia. At the end of December 2013, the Group had excess capital of R4bn available for redeployment. Since then, the Group has utilised a total of R1.6bn, including R1.3bn for the acquisition of a 51% interest in MCIS Insurance in Malaysia as well as R300m for the acquisition of an additional 2.4% stake in the Group's Botswana operations and to fund increased capital requirements of certain non-life Group businesses. The net effect of these transactions and other discretionary capital movements reduced the available discretionary capital to the current R3bn level.
Looking ahead, Dr Van Zyl said the company did not anticipate improvements in the current economic environment."We expect that the general operating conditions will continue to pose challenges for the remainder of the year. However, we remain confident that the quality of our people and continued focus on executing our strategy will see us through," Dr Van Zyl concluded.