We made major progress in executing on our strategic pillars during 2018. Our federal model and diversified profile are major contributors, enabling a dual focus on growing our existing operations while also concluding new corporate transactions to drive enhanced future growth. This diligent focus on strategic execution enabled us to achieve solid growth in 2018 and double-digit average growth rates in most key performance indicators over the last 10 years. Highlights for the year include two major transformative transactions that positions us well for sustainable future growth: the acquisition of the remaining stake in Saham Finances in October 2018 and the approval of a package of Broad-based Black Economic Empowerment (BBBEE) transactions by shareholders in December 2018. Growth of 14% in the value of new covered business (VNB) on a consistent economic basis and more than R2billion in positive experience variance is testimony to Sanlam’s resilience in difficult times.
The Group clusters continued to execute their operational strategies and delivered an overall resilient performance for the 10 months ended 31 October 2018. This is a pleasing result in the context of weak economic conditions in a number of our territories, including South Africa our largest market, and significant volatility in global investment and currency markets. The South African equity market had a particularly weak month in October.
Operating conditions were very challenging during the first six months of 2018 across a number of markets where Sanlam operates. The Group’s well-diversified profile across geographies, market segments and client offerings provided resilience against these headwinds, enabling us to deliver an acceptable operational performance while continuing to create sustainable value for all key stakeholders.
South Africa, our key market for almost 10 decades, experienced significant change since 1918 through periods of both prosperity and hardship.
By aligning and adapting our strategy to stay true to our purpose, we have consistently made a difference in people’s lives. This enabled us to grow to be one of the biggest internationally active insurance groups, delivering significant value to all our stakeholders, including our shareholders since listing in 1998.
We achieved a return of 14,8% for Sanlam shareholders in 2017 as measured by Return on Group Equity Value (RoGEV). This is a resilient performance in a year where our core South African market faced one of its most challenging periods in the last decade, and a fitting tribute to Sanlam’s sustainability as we enter our centenary year in 2018.
Sanlam is one of the biggest internationally active insurance groups globally. Through SEM we have the most extensive insurance footprint in the African continent. The global economy determines our macro operating environment, whereas trends and growth prospects in South Africa, the rest of Africa, India and Malaysia have a direct impact on our resilience and success.
Sanlam is committed to regulatory reform that contributes to the resilience and prosperity of individuals, organisations and society. We recognise that we operate in a highly regulated industry and share regulators’ vision for efficient and effective financial services industries globally. We support regulators in developing tools and mechanisms that will ensure a more predictive response to the next potential crisis. We also welcome the way in which this is evolving to include increased sensitivity for the role of strong ethics, culture and related accountabilities.