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Sanlam ascribed its continued strong performance to the diversified nature of the Group’s operations and a focus on value adding initiatives, assisted by the strength of its own brand and the brands of its international partners.

The Group reported operating earnings growth of 27%. New business volumes grew by 18% to R182 billion.

The Group also announced a dividend of 225 cents per share, up 13% compared to the same period last year.

Other highlights from the 2014 financial results were as follows:

  • Net result from financial services per share increased by 26%
  • Net fund inflows of R42 billion
  • Normalised headline earnings per share up 3%
  • Return on Group Equity Value per share of 18,5%

Commenting on the results, Sanlam Group Chief Executive, Dr Johan van Zyl said all of the Group’s businesses had achieved solid results despite the pressure on economic growth in many markets, industrial action in South Africa and volatile currencies in some countries where we operate.

“Our consistent and strong focus on strategy, our people and our commitment to clients and stakeholders continue to be key to our success in sustaining strong performance despite the challenging environment across many of the markets in which we operate,” Dr Van Zyl said.

Sanlam Personal Finance performed exceptionally well for a large, mature business, with Sanlam Individual Life achieving strong growth in operating profit that was driven mainly by risk underwriting and administration profits. A higher level of assets under management was the main driver of Glacier’s profit contribution and Sanlam Sky benefited from growth in its in-force book over the last number of years, as well as an improved mortality claims experience in 2014.

Sanlam Investments delivered an overall sound performance, bolstered by, among others, a higher level of assets under management, strong investment performance across most Investment Management businesses as well as a favourable mortality claims environment in the Sanlam Employee Benefits business.

Sanlam Emerging Markets reported satisfactory results, including a maiden contribution from Malaysia’s MCIS Insurance, which was acquired in June 2014.

Santam performed very well, more than doubling its contribution in 2014 compared to the previous year. Its underwriting margin improved from 2,8% in 2013 to 8,7% in 2014, benefitting from considerably improved claims experience, particularly in the agricultural sector which experienced more benign weather conditions.

During 2014, Sanlam continued with the implementation of its geographical diversification strategy which essentially focuses on investing in smaller, bolt-on deals and partnerships with established businesses in emerging markets. It concluded a number of acquisitions in 2014 that utilised a net R1,9 billion of surplus capital, These investments contributed to the Sanlam Group, from being substantially South African focussed 10 years ago, now having a presence in 10 other African countries as well as in Europe, India, Malaysia, Australia and USA.

As at 31 December 2014, Sanlam had unallocated discretionary capital of some R3,3 billion which is earmarked for further expansion and diversification of the Group.

The Group also announced that it had reached an agreement with its empowerment partner, Ubuntu-Botho Investments, to continue the partnership and formalised an on-going strategic relationship.

Arguably one of the most successful broad-based black economic empowerment deals in South African history was the relationship established in 2004 between Sanlam and Ubuntu-Botho. This formal arrangement came to an end in December 2013 and at the time had created over R15 billion in value after the settlement of all debt and interest on the debt, from an initial investment of R1,3 billion. Sanlam said the continued partnership with Ubuntu-Botho would be a key part of the Group’s sustainability and future strategy.

Having again achieved a Level 2 BEE status, the Group has made progress in improving its employment equity scorecard and continues to implement initiatives to accelerate progress at middle and senior management levels.

“While we are pleased with our performance in the past year, we are cognisant of the persistent challenging economic environment in the year ahead. We will continue to focus on effectively implementing our strategy and supporting our employees to embrace the critical enabling factors that will help Sanlam to achieve accelerated growth,” Dr Van Zyl concluded.

Details of the results for the year ended 31 December 2014 are available at www.sanlam.com.

Glacier Financial Solutions (PTY)LTD is a licensed financial services provider.
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