Sanlam is one of the largest non-banking financial services groups in South Africa. Our aim is to occupy the top position in terms of profitable market share in all segments in which we compete. We have leading positions in general insurance, and the middle-income, mass affluent and high net worth life insurance and investments segments. We made solid progress in the health, corporate, third-party asset management and entry-level markets, but still need to improve our game to achieve a leading position in these segments.
Notwithstanding low economic growth, political instability, weak business and investor confidence and low foreign investment, our South African operations delivered solid results in the period under review. We have been gaining market share despite the difficult operating environment by focusing on those pockets where we do not have an adequate market share or where new opportunities have emerged. These include recurring premium risk business in the entry-level and middle-income markets, which proved attractive and profitable.
Investors often express their confidence in Sanlam’s ability to perform in challenging circumstances. The 2017 financial year was no exception. Our diversified profile across products, market segments and geographical presence assisted us in achieving this. There is therefore general shareholder support for Sanlam’s approach to reach a leadership position in all segments in South Africa, while recognising the importance of further diversification to entrench our resilience.
We continued embedding and expanding our leading footprint in Africa through an increased shareholding in Saham Finances and the acquisition of PineBridge’s asset management business in East Africa (subsequently renamed Sanlam Investments East Africa). This footprint is a competitive advantage that positions us well for future growth on the continent. We also continued to enlarge our distribution footprint in India. Our efforts to diversify the product lines of our general insurance businesses outside of South Africa gained momentum, albeit at a slower pace than what we would have preferred.
In March 2018, subsequent to the 2017 financial year-end, we announced the acquisition of the remaining 53,4% stake in Saham Finances, subject to regulatory approvals. Being in full control of the business significantly enhances our ability to extract synergies, and undoubtedly vests Sanlam as the leading provider of insurance and investment management on the African continent. We fully acknowledge the risks associated with such a large acquisition. Operational structures within SEM and Santam are being adjusted commensurately, with a more pronounced involvement by Santam, especially in the areas of reinsurance, capital management and specialist lines.
In Malaysia, our focus is on improving the performance and returns of the life and general insurance businesses. Structural growth in Malaysia has been de-emphasised while we execute the Saham Finances and wider Africa opportunity.
Our operations in developed markets have returned to stability and achieved considerably improved profitability in 2017 following the restructuring over the course of 2016. Cost savings are coming through, but we are not yet experiencing an acceptable level of new business and net fund flows to achieve appropriate scale. The 2018 targets set for these performance indicators are demanding. We will investigate partnership opportunities to accelerate the scale and returns of the UK operations.