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All of the life insurance businesses within the Group were sufficiently capitalised at the end of December 2017.

The total admissible regulatory capital (including identified discretionary capital) of Sanlam Life, the holding company of the Group’s major life insurance subsidiaries, covered its CAR 5,8 times under the current solvency regime.

As indicated in previous results announcements, South Africa is implementing a new solvency regime (Solvency Assessment and Management – SAM) modelled on the European Solvency II regime with an anticipated effective date of 1 July 2018. A Solvency Capital Requirement (SCR) target cover range under SAM of between 1,7 times and 2,1 times has been set for Sanlam Life Insurance Limited’s (Sanlam Life) covered business. The R9,5 billion of IFRS-based required capital allocated to these operations at the end of December 2017 translated into a SCR cover of 2,3 times. The SCR cover ratio for the Sanlam Life entity as a whole at 2,7 times exceeded the covered business ratio at the end of December 2017 due to the inclusion of discretionary and other capital held on the Sanlam Life balance sheet as well as investments in Santam and other Group operations that are not allocated to Sanlam Life’s covered business operations (i.e. not included in the R9,5 billion allocated capital referred to above). The Sanlam Group SCR cover ratio of 2,2 times remained in line with the 2,2 times cover at 31 December 2016. The Group will increasingly focus on the Group SCR cover as the main solvency measure.

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