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Financial performance measure

The Group has chosen RoGEV as its main measure of financial performance.

GEV provides an indication of the value of the Group’s operations, but only values the Group’s in-force covered (life insurance) business and excludes the value of future new life insurance business to be written by the Group.

GEV is the aggregate of the following components:

  • the embedded value of covered business, which comprises the required capital supporting these operations and the net present value of their in-force books of business (VIF);
  • the fair value of other Group operations based on longer-term assumptions, which includes the investment management, capital markets, credit, general insurance and wealth management operations of the Group; and
  • the fair value of discretionary and other capital.

Sustained growth in GEV is the combined result of delivery on a range of key performance drivers in the Group. RoGEV measured against a set performance hurdle is therefore used by the Group as its primary internal and external performance benchmark in evaluating the success of its strategy to maximise shareholder value.

Read more about RoGEV and its key drivers.

The RoGEV target is to outperform the Group’s cost of capital. The cost of capital is set at the risk-free nine-year bond rate (RFR) plus 400bps. The compounded RoGEV of the Group since Sanlam demutualised and listed in 1998 comprehensively outperformed this target.

Over shorter measurement periods, RoGEV and adjusted RoGEV also exceeded the hurdle rate:

The RoGEV target for 2017 was set at 13,2% and for 2018 it is set at 13,0% based on the RFR of 9,0% as at the end of December 2017.

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