Sanlam Explained

Sanlam Limited
Type:Public
Foundation:[1]
Location:Bellville, Western Cape, South Africa[2]
Key People:Paul Hanratty CEO[3]
Abigail Mukhuba CFO
Elias Masilela Chairman
Industry:Insurance, asset management, wealth management, investments
Revenue:$87.60 billion (2017)
Net Income:$921 millions(2017)
Num Employees: ~ 103 000 (2018)-->

Sanlam is a South African financial services group headquartered in Bellville, Western Cape, South Africa.[2] Sanlam is one of the largest insurance company in Africa. It is listed on the Johannesburg Stock Exchange, the Namibian Stock Exchange and the A2X.[4] Established in 1918 as a life insurance company,[5] Sanlam Group has developed into a diversified financial services business. Its five business clusters comprise Sanlam Personal Finance, Sanlam Emerging Markets, Sanlam Investments, Sanlam Corporate and Santam.[6]

The group's areas of expertise include insurance (life and general), financial planning, retirement annuities, trusts, wills, short-term insurance, asset management, risk management and capital market activities, investment and wealth. The group operates in South Africa, Namibia, Botswana, Swaziland, Zimbabwe,[7] Mauritius, Malawi, Zambia, Tanzania, Rwanda, Uganda, Kenya, Ghana, Nigeria, Morocco, Mozambique, India, Malaysia and the UK, and has business interests in the US, Australia, Burundi,[8] Lesotho and the Philippines. It has a stake in micro-insurance specialists, UK-based Micro-Ensure Holdings Limited, which has a footprint across Africa[9] and India servicing more than 10 million enrolled clients.

Its 2018 acquisition of SAHAM Finances has made it Africa’s biggest non-banking financial services[10] player and has given it exposure to Morocco, Angola, Algeria, Tunisia, Niger, Mali, Senegal, Guinea, Burkina Faso, Cote D’Ivoire, Togo, Benin, Cameroon, Gabon, Republic of the Congo, Madagascar, Lebanon and Saudi Arabia.

History

The Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappy Beperk (South African National Trust and Assurance Company Limited), Santam, was registered on 28 March 1918. It was then decided to convert the life assurance department into a separate company, and the Suid-Afrikaanse Nasionale Lewens Assuransie Maatskappy Beperk (South African National Life Assurance Company Limited), Sanlam, was registered on 8 June 1918. Sanlam, the subsidiary, later became the spearhead of the operation, while Santam remained focused on short-term insurance.

Sanlam showed a small profit at the end of its first year, declared a bonus, and continued to grow consistently from there.

Santam remained the controlling shareholder until 1954 when Sanlam became an independent mutual life assurance company, as well as the largest single shareholder in Santam.

Over the years, Sanlam's focus gradually shifted from traditional life insurance to providing a broader range of financial products and services. In 1998 Sanlam demutualised, listing on the Johannesburg Stock Exchange (JSE) Ltd and the Namibian Stock Exchange. This changed Sanlam from a mutual entity into a public company with a share capital, namely Sanlam Life Insurance Ltd. At the same time a separate company, Sanlam Ltd, was installed as the parent company of the Sanlam group of businesses. The group was also restructured into several independent businesses within a federal business structure.

Today, Sanlam is a diversified financial services provider with an extensive product offering catering for all market segments. The group has consistently grown its local as well as an international footprint – it now has a presence in 33 African countries[11] also India, Malaysia, the UK and Ireland, the USA, Australia and the Philippines.

In 2018, Sanlam concluded its $1.1 billion acquisition of SAHAM Finances.[12] Additionally, the group announced details of its R11 billion BEE deal, which will see it increasing its direct black shareholding to 18% and black economic ownership to 35%.[13]

In December 2021, The Sanlam Group entered into discussions with Allianz for the acquisition of the entire group in Africa except South Africa. Discussions are conducted between the group's headquarters in Bellville and Munich.[14]

In February 2023, South African wills and estates administrator Capital Legacy and Sanlam announced that they would joining forces by creating a wills, estates and trusts business together. The transaction, which is subject to regulatory approval, will see Sanlam Life Insurance Limited (Sanlam Life) sell its trust business, Sanlam Trust, to Capital Legacy and Sanlam Life acquiring a 26% interest in the enlarged Capital Legacy Group that includes the Sanlam Trust business following completion of the transaction. The merged entity will be managed by Capital Legacy.[15] [16]

Economic empowerment

Sanlam has since 1993 contributed to broad-based black economic empowerment (B-BBEE) through the group’s partnership with Ubuntu-Botho Investments.[17]

The Ubuntu-Botho B-BBEE partnership resulted in a broad-based black empowerment consortium buying a 10% shareholding in Sanlam[18] in what was to become one of the most far-reaching black empowerment transactions in South Africa to date.

In December 2013, the initial 10-year contractual period of the transaction with Ubuntu-Botho[19] ended, with a final total of 66.5 million deferred shares qualifying for conversion to ordinary shares. The deal created value of about R15 billion, making it arguably one of the most successful transactions of its kind in South African history.[20] In 2014, an agreement was reached to extend the partnership with Ubuntu-Botho into the future.[21]

In 2018, Sanlam announced details of BEE transactions, which will increase its direct black shareholding to 18% and black economic ownership to 35%. The Group will sell 5% of its issued shares to new and existing B-BBEE shareholders, creating a master trust that caters to 80% of the intended beneficiaries, with Ubuntu-Botho benefitting from the other 20%.[22]

Operations

The corporate office of the Sanlam Group is responsible for centralised functions that include strategic direction, group financial and risk management, group marketing and communications, group human resources and information technology, group sustainability management, corporate social investment and general group services.

In addition, the Sanlam group operations are managed through five operating clusters:

The core businesses within each cluster are as follows (wholly owned unless otherwise indicated):

Sanlam Personal Finance

The largest business in the Sanlam Group of companies, with 11,406 employees and assets worth R 472,328 million under management.

Strategic business development consists of the following diversified financial services: Sanlam Trust (estate and trust services), Multi-Data (electronic money-transfer activities), Sanlam Healthcare Management (medical scheme administration services), Sanlam Personal Loans (70%) (personal loans joint venture), Reality (loyalty programme) and Anglo African Finance (55%) (trade and bridging finance).

Sanlam Emerging Markets

The Sanlam Emerging Markets cluster is responsible for Sanlam’s financial business services (life insurance, general insurance, banking, retail credit, health, bancassurance, asset management and specialist general insurance products) in emerging markets outside South Africa:

Credit and banking:

Investment management:

General insurance: Jointly responsible in partnership with Santam for managing general insurance business through:

Sanlam Investments

Asset management

Multi-management

Alternative investments

Passive investments

Capital management:[26]

Employee benefits

Wealth management

International investments

Santam

Sanlam has an effective 60% interest in Santam, which in turn operates through the following businesses:

Sanlam group executive leadership

Recent news

Sanlam reported a 22% growth in new business volumes to R100 billion in the six months to June 2015,[30] compared to the same period in 2014. The net result from financial services climbed by 5% in the first half of 2014, and by 11% when certain one-time factors are excluded. The annualized RoGEV per share of 13% exceeded the aim of 12.1%. The group's principal performance target for measuring shareholder value creation is RoGEV.

Ian Kirk was appointed as group chief executive[31] and executive director of Sanlam Limited and Sanlam Life Insurance Limited from 1 July 2015. This follows the retirement of former Group Chief Executive Dr Johan van Zyl from this position, as well as from the boards of Sanlam Limited[32] and Sanlam Life Insurance Ltd.

In November 2015 Sanlam announced that the group had agreed to buy a 30 percent stake in Morocco-based Saham Finances, which operates in 26 countries predominantly across Africa with a presence in the Middle East. The US$375 million deal will significantly expand the group's African footprint.[33]

Former CEO, Dr Johan van Zyl, joined the Sanlam Limited and Sanlam Life Insurance Limited Boards as a non-executive director and representative of Ubuntu-Botho Investment Holdings, Sanlam's black economic empowerment partner as of 18 January 2016.[34]

A new business cluster known as Sanlam Corporate was created early in 2016. The unit will be headed by the former CEO of Munich Re sub-Saharan Africa, Junior John Ngulube and will offer corporate clients life insurance, general insurance, investments, health insurance, retirement, financial planning and advice.[35]

In February 2023, Capital Legacy and Sanlam announced that they would be joining forces by creating an even more compelling wills, estates and trusts business together.[36] [37] [38]

See also

Notes and References

  1. Web site: About . Sanlam . 2016-07-28.
  2. Web site: Contact Us . Sanlam . 2016-07-28.
  3. Web site: Business Live - Paul Hanratty . www.businesslive.co.zam . 31 March 2020.
  4. Web site: A2X lands Sanlam's secondary listing. BusinessLIVE. en-ZA. 2019-08-19.
  5. Web site: Sanlam – Hot or Not. CNBCAfrica.com. 2015-11-18. 19 November 2015. https://web.archive.org/web/20151119091750/http://www.cnbcafrica.com/video/?bctid=4617208182001. dead.
  6. Web site: Sanlam: A firm in fine fettle. BusinessLIVE. en-ZA. 2019-08-19.
  7. Web site: Sanlam in $11.6m Zim insurance deal. 2015-05-21. Fin24. 2019-08-19.
  8. Web site: ENSafrica - Burundi. www.ensafrica.com. 2019-08-19.
  9. Web site: Mozambican insurer changes name to Sanlam Seguro de Vida Macauhub English. Macauhub English. 2015-10-30. en-us.
  10. Web site: Sanlam seals deal that makes it Africa's largest non-banking financial services group. cfo.co.za. 2019-08-19. 19 August 2019. https://web.archive.org/web/20190819095938/https://cfo.co.za/article/sanlam-seals-deal-that-makes-it-africas-largest-nonbanking-financial-services-group. dead.
  11. Web site: Sanlam digging deeper to extract value from emerging markets IOL Business Report. www.iol.co.za. en. 2019-08-19.
  12. Web site: Sanlam to acquire Saham Finances for $1.1bn. africa.businesschief.com. 2019-08-19.
  13. News: 2018-10-11. Biggest African Insurer Seals Largest Deal Yet in Growth Drive. en. Bloomberg.com. 2020-09-07.
  14. News: 2021-12-22. Sanlam sur le point d'acquérir toutes les filiales d'Allianz en Afrique (Exclusif). fr. Financial Afrik. 2021-12-22.
  15. Web site: 6 February 2023 . Sanlam sells trust business to Capital Legacy . 6 February 2023 . B2BCentral.
  16. Web site: 3 February 2023 . Sanlam buys Capital Legacy stake, takes out Brightrock minorities . 3 February 2023 . CNBC Africa.
  17. Web site: Ubuntu-Botho/Sanlam BEE deal. Financial Mail. 2015-10-19.
  18. News: BRIEF-Santam sells 76 pct of Indwe to UBI and Sanlam. Reuters. 30 September 2015. 2015-10-30.
  19. Web site: Sanlam BEE deal delivers R15bn in value. 2014-03-23. Fin24. 2019-08-19.
  20. Web site: Sanlam reports another set of solid financial results – FAnews .
  21. News: 2015-03-06. Sanlam Extends Deal With Billionaire Motsepe for Another Decade. en. Bloomberg.com. 2020-09-07.
  22. Web site: Sanlam unveils new multi-billion BEE deal. BusinessLIVE. en-ZA. 2019-08-19.
  23. Web site: BIHL goes on a shopping spree Botswana Gazette. www.gazettebw.com. 2015-10-30.
  24. Web site: Sanlam to unlock insurance potential. www.dailynews.co.tz. 2015-11-18.
  25. Web site: How to start investing in Satrix. Fin24. 2015-10-30.
  26. Web site: Sanlam Capital Markets Limited: Private Company Information – Businessweek. Businessweek.com. 2015-10-30.
  27. Web site: Santam buys the rest of MiWay. Moneyweb. 8 December 2010 . 2015-10-30.
  28. Web site: Professionals: Short-term » Press Room > Santam acquires 100% shareholding in Centriq. www.insurancegateway.co.za. 2015-10-30. 4 March 2016. https://web.archive.org/web/20160304032822/http://www.insurancegateway.co.za/print//ShorttermProfessionals/PressRoom/ViewPress/Irn%3D2732%26URL%3DSantam+acquires+100+shareholding+in+Centriq#.VjNC8rcrLIU. dead.
  29. Web site: Board Members . 2021-04-21 . www.sanlam.com . en-ZA.
  30. Web site: 2015 Interim Results . 2015-10-15 . www.sanlam.co.za.
  31. Web site: Sanlam names insider Ian Kirk as CEO. Business Day Live. 2015-10-15.
  32. Web site: SLM:Johannesburg Stock Quote – Sanlam Ltd. Bloomberg.com. 2015-10-27.
  33. Web site: Sanlam Group's Africa expansion eNCA. www.enca.com. 2016-02-16. eNCA.
  34. Web site: Sanlam appoints Munich Re exec to head up new unit. Moneyweb. 18 January 2016 . 2016-02-16. en-US.
  35. Web site: Cluster deepens black leadership on Sanlam executive. Business Day Live. 2016-02-16.
  36. News: Theunissen . Garth . 2023-02-03 . Sanlam punts 'Tetris-like' fit with beefed up Capital Legacy interest . Business Day . 2023-02-03.
  37. Web site: 6 February 2023 . Strategic transaction between Capital Legacy and Sanlam Limited announced . 6 February 2023 . Bizcommunity.
  38. News: Buthelezi . Londiwe . 3 February 2023 . Sanlam buys out BrightRock, acquires a stake in Capital Legacy in another giant acquisition move . News24 . 3 February 2023.

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