Sanlam (SLM) is one of the largest insurance and financial services groups in South Africa, with a rich history dating back to its establishment in 1918. The company demutualised in 1998 and subsequently listed on both the JSE and the Namibian Stock Exchange. Sanlam operates across multiple geographies, including South Africa, the UK, America, Europe, India, Australia, and various African countries. Its extensive product range covers general insurance, life insurance, asset management, banking, credit, health, and bancassurance.
The business is organized into four key divisions:
1. Sanlam Investment Holdings (SIH): Now 25% owned by African Rainbow Capital.
2. Sanlam Emerging Markets: This includes its 84.5% interest in Saham, a leading insurer in French-speaking African countries.
3. Sanlam Personal Finance: Primarily based in South Africa, this division contributes about 50% of the company's profits.
4. Santam: In which Sanlam owns a 61% stake.
Sanlam’s operations outside of South Africa span 11 other African countries and Malaysia. Saham, its subsidiary, operates in 33 French-speaking countries, employing 3,000 staff members across 700 branches and offering a similar product mix to Sanlam. The company also owns a 26% stake in Shriram, a prominent insurance and financial services provider in India. Additionally, Sanlam has acquired 69% of Catalyst Fund Managers, a Cape Town-based manager of listed property assets, and 100% of CIG Fund Management, an Irish company.
Sanlam’s South African operations are significantly impacted by the low levels of consumer spending and the country's economic recession. The company is 18% black-owned and has partnered with African Rainbow Capital (ARC) to focus on lower- and middle-income consumers and small businesses. Sanlam committed R2 billion in seed capital for this partnership. On 14th June 2021, Sanlam acquired the Alexander Forbes group risk and retail life business for R100 million. Additionally, the company announced that it would require its employees to be vaccinated against COVID-19 starting in 2022, similar to Discovery.
In its results for the six months to 30th June 2023, Sanlam reported a net result from financial services up 26% and headline earnings per share (HEPS) up 118%. The company noted that cash net results from financial services increased by 30%, with broad-based improvements across all divisions, including a 38% increase in net results from general insurance and a 28% increase in life insurance.
In an operational update for the nine months to 30th September 2023, Sanlam reported new business volumes up 13% and operational earnings up 35%. The group maintained a strong solvency position, with a solvency cover ratio of 170%. A trading statement for the year to 31st December 2023 estimated that HEPS would increase by between 43% and 53%, driven by higher investment returns on the shareholder capital portfolio.
Further, in an update for the three months to 31st March 2024, the company reported a 14% increase in cash flow and a 15% increase in investment returns. A trading statement for the six months to 30th June 2024 estimated that HEPS would rise by between 35% and 45%, highlighting strong growth across all lines of business, particularly in life and general insurance.
Sanlam is recognized as one of the JSE's foremost blue-chip shares, with a history of steady growth. After recovering somewhat from the market declines caused by the COVID-19 pandemic, the stock is currently trading at a P/E ratio of 12.69, which is considered good value at these levels. In a joint announcement on 18th June 2024, Sanlam agreed to acquire 60% of Multichoice's insurance business for R1.2 billion in cash, further expanding its footprint in the financial services sector.
The business is organized into four key divisions:
1. Sanlam Investment Holdings (SIH): Now 25% owned by African Rainbow Capital.
2. Sanlam Emerging Markets: This includes its 84.5% interest in Saham, a leading insurer in French-speaking African countries.
3. Sanlam Personal Finance: Primarily based in South Africa, this division contributes about 50% of the company's profits.
4. Santam: In which Sanlam owns a 61% stake.
Sanlam’s operations outside of South Africa span 11 other African countries and Malaysia. Saham, its subsidiary, operates in 33 French-speaking countries, employing 3,000 staff members across 700 branches and offering a similar product mix to Sanlam. The company also owns a 26% stake in Shriram, a prominent insurance and financial services provider in India. Additionally, Sanlam has acquired 69% of Catalyst Fund Managers, a Cape Town-based manager of listed property assets, and 100% of CIG Fund Management, an Irish company.
Sanlam’s South African operations are significantly impacted by the low levels of consumer spending and the country's economic recession. The company is 18% black-owned and has partnered with African Rainbow Capital (ARC) to focus on lower- and middle-income consumers and small businesses. Sanlam committed R2 billion in seed capital for this partnership. On 14th June 2021, Sanlam acquired the Alexander Forbes group risk and retail life business for R100 million. Additionally, the company announced that it would require its employees to be vaccinated against COVID-19 starting in 2022, similar to Discovery.
In its results for the six months to 30th June 2023, Sanlam reported a net result from financial services up 26% and headline earnings per share (HEPS) up 118%. The company noted that cash net results from financial services increased by 30%, with broad-based improvements across all divisions, including a 38% increase in net results from general insurance and a 28% increase in life insurance.
In an operational update for the nine months to 30th September 2023, Sanlam reported new business volumes up 13% and operational earnings up 35%. The group maintained a strong solvency position, with a solvency cover ratio of 170%. A trading statement for the year to 31st December 2023 estimated that HEPS would increase by between 43% and 53%, driven by higher investment returns on the shareholder capital portfolio.
Further, in an update for the three months to 31st March 2024, the company reported a 14% increase in cash flow and a 15% increase in investment returns. A trading statement for the six months to 30th June 2024 estimated that HEPS would rise by between 35% and 45%, highlighting strong growth across all lines of business, particularly in life and general insurance.
Sanlam is recognized as one of the JSE's foremost blue-chip shares, with a history of steady growth. After recovering somewhat from the market declines caused by the COVID-19 pandemic, the stock is currently trading at a P/E ratio of 12.69, which is considered good value at these levels. In a joint announcement on 18th June 2024, Sanlam agreed to acquire 60% of Multichoice's insurance business for R1.2 billion in cash, further expanding its footprint in the financial services sector.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.