Where we have a leading position
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 defend our leading position by being client-centric and responsive to the need for stability and protection in volatile market conditions. Our distribution network, with increased omni-channel capabilities, provides an additional layer of security through sound advice and personal relationships.
We are a leader in risk products and life insurance in the middle income market. According to the 2017 Swiss Re Affluent Report, we have the largest market share by sum insured (BrightRock included) in South Africa. The traditional risk market in South Africa is not growing and therefore highly competitive. BrightRock’s contribution has enabled us to retain a leadership position and grow market share.
Glacier, SPF’s wealth and investment unit, is one of South Africa’s leading investment platforms in the traditional and mature affluent market with a leading intermediated model. Glacier Invest is currently the largest Discretionary Fund Manager (DFM) in South Africa according to assets under management.
Sanlam’s leadership position in retirement products will be challenged by new regulation anticipated through the phased implementation of the Retail Distribution Review (RDR) by the Financial Sector Conduct Authority (FSCA) and default annuity options in retirement funds. RDR will bring changes to the distribution of financial products and the provision of financial advice by financial institutions. We have, however, positioned our businesses to use the changes in regulation as an opportunity to gain market share in the retail and institutional space rather than a threat.
SIG has a leading position in private wealth management in South Africa. It pioneered index-tracking investment capabilities in South Africa with Satrix, which is the largest equity index-tracking provider in the country. SIG’s Implemented Consulting is also a market-leading solution widely used by financial planners and consultants.
Santam is the leader in general insurance in South Africa with a market share of more than 22%. The Santam Specialist business units include Santam Marine, Santam Transport, Santam Agriculture and Corporate property, engineering and liability, all market leaders in their insurance classes in South Africa.
Sanlam also leads by reputation: Sanlam was identified as the top long-term insurer by 52 short-term and 72 long-term insurance independent financial advisers (IFAs) in South Africa in a survey conducted by SBG Securities.
The proposed BBBEE transactions, combined with achieving a level 1 status in terms of the FSC scorecard, will place Sanlam in a strong, market-leading position in terms of empowerment and BBBEE credentials.
The 2018 adjusted Return on Group Equity Value (RoGEV) per share of 19,4% exceeded the target of 13% despite challenges in a number of markets. RoGEV remains the most appropriate indicator for Group performance as it incorporates the results of all the major value drivers in the business.
The Sanlam Board approved a 7,6% increase in the Sanlam dividend to 312 cents per share, in line with the objective of real dividend growth of 2% to 4% per annum.
Where we lag in terms of our vision
Sanlam has a number two position in the entry-level market in South Africa despite good organic growth through Sanlam Sky. We are driving towards a leadership position in this market segment through continued accelerated organic growth in Sanlam Sky, our partnership with Capitec and the launch of African Rainbow Life in 2019.
The proposed BBBEE transactions will address our lagging position in third-party asset management, with African Rainbow Capital (ARC) potentially acquiring a share in this business. Sanlam’s improved BBBEE credentials will also create further momentum for our healthcare and employee benefits offerings in the local corporate market.
SIG is working towards leading positions in absolute return and balanced funds by using the Sanlam distribution model. Alternative asset classes provide further opportunities to attract profitable new flows and clients. SIG made progress by acquiring a controlling stake in Catalyst Fund Managers, a specialist in managing listed real estate investments in South Africa and globally for retail and institutional investors. The acquisition diversifies and strengthens SIG’s current asset management capabilities and expands its product offering.
Strategic pillars that support execution to address these gaps:
Profitable top-line growth through a culture of client-centricity
Extracting value through innovation and improved efficiencies
Enhancing Sanlam’s resilience and earnings growth through diversification
Responsible capital allocation and management