Table of Contents
Key Points
- Sanlam’s net inflows doubled to R40 billion ($2.2 billion) despite R2.5 billion ($137 million) in withdrawals under the new two-pot retirement system.
- The group posted 15% growth in key earnings and 12% higher life insurance sales, supported by South Africa and Asia.
- Sanlam expanded globally with a stake in India’s Shriram Group, targeting long-term growth in high-potential markets.
Sanlam, a leading financial services group listed on the Johannesburg Stock Exchange and partly owned by South African billionaire Patrice Motsepe, reported a significant rise in net client cash inflows to R40 billion ($2.2 billion) for the nine months ending Sept. 30, 2024. This figure more than doubles the inflows recorded in the same period last year, demonstrating the company’s resilience amid regulatory changes introduced by South Africa’s new two-pot retirement system.
The two-pot system, which came into effect on Sept. 1, 2024, allows retirement fund members to withdraw one-third of their savings through a savings pot while preserving the remaining two-thirds for retirement. In its first month, this policy triggered withdrawals of R2.5 billion ($137 million) from retirement funds, with R1.5 billion ($82 million) withdrawn by over 78,000 members.
Despite the anticipated ongoing outflows from retirement funds, Sanlam’s robust financial performance highlights its ability to withstand these challenges and deliver sustained growth.
Strong operational and financial performance
During the nine-month period, Sanlam posted double-digit growth across key operational metrics. The Net Result from Financial Services (NRFFS), a crucial measure of operational earnings, rose by 15 percent, while net operational earnings increased by 17 percent, supported by improved investment returns on shareholder capital.
The group also achieved a 12 percent increase in new life insurance business volumes, driven by strong single-premium growth in South Africa and contributions from its operations in Asia.
Sanlam’s general insurance segment performed well, with its subsidiary Santam recording an eight percent rise in net earned premiums. Its pan-African portfolio, managed through the SanlamAllianz joint venture, saw a nine-percent growth in net premiums, while its business in Asia reported an impressive 30-percent increase, reflecting the group’s diversification into high-growth regions.
Expansion into India bolsters long-term strategy
In 2024, Sanlam took a major step toward international expansion by acquiring a controlling stake in Shriram Group’s insurance business in India. This move positions the company to capitalize on one of the fastest-growing economies globally, where low insurance penetration presents a significant growth opportunity.
While the initial costs of establishing distribution channels in India impacted short-term earnings, the long-term outlook remains highly promising. Sanlam anticipates strong growth as more Indian consumers adopt savings and investment products, aligning with the group’s strategy to tap into high-potential markets.
Positioned for sustainable growth
Sanlam’s ability to deliver record net client inflows and maintain double-digit growth in key segments underscores its leadership in Africa’s financial services sector. The company’s expansion into global markets, particularly in Asia and India, further solidifies its position as a growing player on the international stage.
Despite the challenges posed by regulatory changes such as the two-pot system, Sanlam has demonstrated adaptability and resilience. Its diverse portfolio, strong operational performance, and commitment to global expansion highlight its capacity for sustained success in 2024 and beyond.
This performance reinforces Sanlam’s role as a driving force in the financial services industry, both in Africa and internationally.
