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Key Points
- South African insurer Sanlam, partially owned by billionaire Patrice Motsepe, is expanding into India's asset and wealth management sector.
- Sanlam plans to form an equal joint venture with Shriram Capital Group, focusing on wealth and advisory services.
- Sanlam's India operations have been a significant contributor to its profits, with headline earnings rising 43% in the first half of 2024.
Sanlam, Africa’s leading insurer, partly owned by South African billionaire Patrice Motsepe, is set to expand into India's asset- and wealth-management industry. The move is part of a broader strategy to capitalize on growth opportunities in one of the world’s fastest-growing major economies.
The insurer plans to enhance its partnership with Shriram Capital Group by establishing an equal joint venture focused on wealth and advisory services. This new venture builds on Sanlam’s initial investment in 2005, which has already seen success in the credit and insurance sectors.
South African insurance giant reaps rewards in India
Sanlam Chief Executive Officer Paul Hanratty highlighted the potential of India’s rapidly growing economy, with a significant portion of the population now able to save and invest for the future. “A large number of people are breaking out of the real poverty trap, so they’re able to start focusing on providing for the future,” Hanratty said in an interview Thursday.
Sanlam's India operations have significantly contributed to its performance, accounting for 16 percent of profit for the six months ending June 30, up from 10 percent in 2021. Headline earnings surged 43 percent during this period, driven by gains in life and health insurance, a spike in general insurance, and a rebound in investment management. The company's preferred profit metric, net result from financial services, rose 19 percent per share.
The International Monetary Fund forecasts India's $3.9-trillion economy will expand by 6.8 percent this year, while South Africa is expected to grow by just 0.9 percent. India's wealth is projected to hit $730 billion by 2028, attracting major global investors like HSBC Holdings Plc, Barclays Plc, and BlackRock Inc.
“The operating environment has been a little bit better in the first half of 2024,” Hanratty noted, highlighting the stabilizing effect of South Africa’s May elections, which resulted in the African National Congress forming a multiparty government. This political shift has provided a more favorable backdrop for Sanlam’s domestic operations.
Sanlam strengthens ARC partnership with $135-million investment
Founded in 1918, Sanlam has a market cap of R143 billion ($7.6 billion) on the Johannesburg Stock Exchange (JSE). Patrice Motsepe, Africa’s first Black billionaire, owns 7.8 percent of Sanlam through Ubuntu-Botho Investments and is the deputy chairman.
Sanlam is expanding globally, highlighted by its $1.9-billion joint venture with German financial services firm Allianz SE in Africa, enhancing its role in the financial sector.
The group’s unit, Sanlam Life, plans to acquire a 25-percent stake in African Rainbow Capital’s Financial Services Holdings (FSH) for $135 million. This strengthens Sanlam’s ties with ARC, led by Motsepe, and underscores its commitment to growth and innovation in key markets.
