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A Partnership for Africa

Sanlam’s acquisition of Saham Finances became effective 9 October 2018, after regulators in various jurisdictions approved the deal. Sanlam Emerging Markets and Santam hold an effective interest in Saham Finances of 90% and 10% respectively.

Key facts about the transaction and parties:

  • The transaction is the largest in Sanlam’s history and makes us the largest insurer across the African continent.
  • Sanlam is now among the top three market leaders for life insurance in 11 African countries and for general insurance in 8 African countries.
  • Saham Finances is the largest insurance company in Morocco, which is the second-largest insurance market in Africa after South Africa.

About Saham Finances

Saham Finances is an insurance group with operations in 26 countries across North, West and East Africa, and the Middle East. It writes personal lines general insurance business which exceeds 80% of its portfolio. Saham Finances has 65 subsidiaries, a network of 700 branches and a staff complement of 3 000. Saham Finances has a leading market share in many of the markets in which it operates. Saham Finances owns inter alia 58,48% of Saham Assurance Morocco, which is listed on the Moroccan Stock Exchange.

Acquisition Rationale Summary

  • Creating the ‘go-to’ insurer for multinationals operating in Africa
  • Becoming the preferred partner to brokers, banks and other distribution entities operating across Africa
  • Establishing the preferred network partner to international insurers with no African footprint

Transaction Rationale and Strategic Alignment

Vision: Be a leading Pan-African financial services group with a meaningful presence in India and Malaysia
Enhancing Sanlam’s resilience and earnings growth through diversification
Responsible capital management and allocation

Potential Synergies between Sanlam, Saham Finances and Santam

Saham Finances enables Sanlam to deepen its presence in North Africa, Francophone West Africa and Lusophone countries in Southern Africa. This creates a unique positioning on the African continent. We are able to service multi-national clients and their intermediaries more effectively than any other group operating across the continent. The line of business diversification within the overall SEM operations improves earnings resilience.

Life insurance currently contributes less than 20% of Saham Finances’ operating profit. Sanlam’s life insurance expertise elsewhere in Africa positions us very well to grow this line of business across the Saham Finances footprint. This spans several African markets with favourable demographic profiles, strong economic growth prospects and low insurance penetration.

General insurance penetration in Africa is low. However, markets are becoming receptive due to population growth, urbanisation, economic growth and rising consumer demand for and acquisition of assets. Support to the other SEM general insurance businesses will be implemented over time in line with Saham Finances’ operational capacity.

SEM’s current health insurance offerings in Zambia and Uganda have already been transferred to Saham Finances, with feasibility studies in respect of the roll-out of assistance business in Southern Africa progressing well.

Focus on these lines of business will be enhanced by amending Santam’s participation in SEM’s African general insurance businesses to focus largely on reinsurance and specialist lines.

A Phased Approach to Africa

Sanlam started to grow its African footprint with the 2005 acquisition of African Life, and notable expansion activities since then include a partnership with Nigerian bank FBN and asset management in Kenya following the acquisition of PineBridge East Africa in 2017.

Sanlam and Saham Finances began their partnership in 2016, when Sanlam Emerging Markets acquired a 30% stake in Saham Finances. Sanlam increased its stake to 46,6% the following year.

Saham Finances will be branded as a ‘member of Sanlam Group’ over the short term across its existing businesses. With the conclusion of the transaction, Sanlam’s geographic footprint in Africa is almost complete. The next phase is to ensure that there are strong, leading businesses in every country and that our product offering is available across the continent. SEM remains interested in Egypt and Ethiopia, though regulations currently prevent investment access to the latter.

The conclusion of this transaction is an important milestone in achieving our vision of becoming a leading financial services group on the continent. The confluence of the combined footprint and respective expertise of Sanlam, Santam and Saham Finances provides the Sanlam Group with an opportunity to grow its life insurance businesses in Francophone markets as well as leverage the Group’s expertise to grow the general insurance portfolio. We are uniquely positioned to be the ‘go to’ financial services partner for multinationals doing business on the continent.

Ian Kirk, Group Chief Executive

Sanlam Life Insurance is a licensed financial service provider.
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