Following the conclusion of this transaction, the Sanlam Group, which celebrates its centenary this year, will own 100% of SAHAM Finances, firming its position as the largest non-banking financial services group in Africa. Sanlam and its general insurance subsidiary, Santam, first acquired a joint 30% stake in SAHAM Finances in February 2016 and a further 16.6% in May 2017. Santam is evaluating its options with respect to the current transaction but remains fully committed to and supportive of the partnership and will confirm the extent of its participation before the transaction becomes effective.

SAHAM Finances is one of the largest insurers in Africa and is the market leader in most of the 26 countries in which it operates in North, West and East Africa as well as in the Middle East. The company owns 58.48% of SAHAM Assurance Morocco, which is listed on the Casablanca Stock Exchange.

Sanlam Group Chief Executive Officer, Mr Ian Kirk, said: “The acquisition of the remaining 53% of SAHAM Finances, which increases our shareholding to 100% in the Group, is the next logical step for Sanlam and enables us to have an even more meaningful presence across sub-Saharan and North Africa, in line with our strategy. Since our partnership began in 2016, we have developed a number of projects to unlock synergies between SAHAM Finances and Sanlam. Given our footprint, the transaction positions Sanlam as the ‘go to’ financial services provider for multinationals, brokers, banks, other distribution entities as well as a preferred network of partners for international insurers with no African footprint.”

Mr Kirk added that the transaction would allow Sanlam to extract further synergies and to become a truly pan-African insurance provider, increasing its exposure to high-growth markets as well as general insurance products.

Commenting on the transaction, SAHAM Group’s spokesperson, Mr Moulay Mhamed Elalamy, said: Saham Group values greatly the partnership with Sanlam, a company that shares the same values and the same ambition for the continent. We wish to deepen and diversify this kind of alliance with other major players in order to fast-track our development.”

Commenting on the results, Mr Kirk said: “We are pleased with the overall solid performance of the Group, which is the result of our sustained focus on executing our strategy, supported by our committed staff and multi-level management team. Despite the challenging economic and political environments in recent years, we have achieved pleasing growth rates in most key performance indicators.

“This is a fitting tribute to those who came before us in building and sustaining this resilient business in the past 100 years and we are grateful to our various stakeholders and partners who have been part of Sanlam over the years.”

New business volumes declined by 1%, amid pressure on single premiums in South Africa, Namibia and Botswana. Low investor confidence in South Africa had a particularly negative effect. Life insurance new business volumes increased by 2%, investment business inflows declined by 5% and general insurance-earned premiums increased by 16%. Excluding structural activity, exchange rate differences and the R4.6 billion new mandate received from the Botswana Public Officers’ Pension Fund in 2016, new business volumes increased by 1%. A decline in lower-margin single premium business conceals strong growth in the more profitable lines of recurring premium business. Sanlam Sky and Individual Life within SPF achieved sterling growth in sales of recurring premium risk business, which contributed to an exceptional value of new life business performance.

Glacier achieved sterling growth of 17%. Life investments achieved profit growth of 29%, largely due to positive annuity mortality experience. The LISP business’ profit declined by 5% due to lacklustre investment market performance for most of the year and a reallocation of expenses to Glacier as part of the SPF restructuring.

Strategic Business Development profits increased by 3%. Growth in the size of the Sanlam Personal Loans book supported 13% growth in the business’ profit contribution. This was largely offset by investments to improve the benefits and attractiveness of the Reality loyalty scheme.

Sanlam Emerging Markets (SEM) grew its net result from financial services by 15% including structural activity and exchange rate differences. Organic growth in constant currency amounted to 10%.

Namibia’s net result from financial services increased by 14%, while the Botswana operations achieved mixed results with an overall decline of 6% in net result from financial services (-1% in constant currency). Lower annuity business sales in a competitive environment and credit-related provisioning had a negative impact on life insurance earnings. The other businesses achieved good growth.

Sanlam Investments (SI) achieved overall growth of 12% in its net result from financial services (17% in constant currency), with sterling performances from Capital Management and the International businesses.

The Investment Management SA net result from financial services declined by 20%, attributable to low growth in assets under management and lower performance fees.

Wealth Management net result from financial services increased by 14%, supported by strong growth in performance fees and lower start-up losses incurred in new business units. The International business experienced a sharp turnaround in profitability following the restructuring in 2016. Net result from financial services grew by 92% (116% in constant currency). Capital Management achieved 19% growth in its net result from financial services. One-off income from equity structuring and financing deals and the revaluation of property finance deals contributed some R50 million (after tax).

Sanlam Corporate, which includes Sanlam Employee Benefits (SEB) and Sanlam Health, increased its net result from financial services by 9%, an aggregate of 29% growth in the Healthcare contribution and 4% growth at SEB. The Healthcare businesses benefited from income earned on new business as well as cost efficiencies. At SEB, increased allowance for one-off project expenses and high disability and mortality claims experience partly offset good growth at the investments business, which benefited from positive annuity mortality experience and asset mismatch profits.

The Group redeployed a net total of R2.8 billion in 2017 in respect of new and bolt-on transactions, including the following major acquisitions:

• The Group entered into agreements for the acquisition of Absa’s employee benefits and actuarial consulting business to add scale to SEB’s offering for a consideration of R285 million. The transaction remains subject to final regulatory approval.
• Sanlam Investments acquired a 30% stake in EasyEquities, an innovative low-cost investment platform, which significantly enhanced the Cluster’s reach into the lower income markets and complements its Satrix index-tracking offering.
• The acquisition of an additional 16.6% stake in SAHAM Finances for a consideration of R1.9 billion. This was in addition to approximately R2.6bn already earmarked in the previous year for this transaction. The disposal of the Group’s stakes in the Enterprise Group in Ghana enabled full settlement of the acquisition in cash.
• The acquisition of a controlling stake in PineBridge Investments East Africa, now Sanlam Investments East Africa, and other smaller transactions utilised some R260 million.
• SEM acquired the non-controlling interests in the Soras Group in Rwanda for R113 million and invested R94 million to capitalise its Ugandan business, which expanded its product lines through the acquisition of Lion Assurance, a general insurance business.

As at 31 December 2017, Sanlam had unallocated discretionary capital of R2 billion. The Group will continue to utilise discretionary capital for value-accretive investment opportunities.

In March 2018, Sanlam once again achieved a Level 2 Broad-based Black Economic Empowerment rating as determined by the Financial Sector Charter. Transformation underpins the strategic pillars of the Group’s business strategy and is an ongoing priority.