Insurance | Financial Planning | Retirement | Investments | Wealth

GLACIER INVESTMENT SUMMIT

Jurie Strydom, Sanlam Personal Finance CEO

06 February 2020

1. Overview

2. Strategic focus for the Sanlam Group: 2020 and beyond

3. Operating environment

4. Outlook

Overview1.

A PROVEN STRATEGY THAT DELIVERS

Our purpose

Our purpose is to build a world of

Wealthsmiths™, that supports people

in living their best possible lives

through financial resilience and

prosperity at the individual,

organisational and societal levels

Our values

To:

Act with integrity;

Grow shareholder value through

innovation and superior

performance

Lead with courage

Serve with pride; and

Care because we respect one

another

Our strategic intent

Our strategic intent is to create sustainable value for all stakeholders.

Our vision in

Africa, India and Malaysia

To be a leading Pan-African

financial services group with

a meaningful presence in

India & Malaysia

Our vision in

developed markets

To play a niche role in

wealth- and investment

management in specific

developed markets

Our vision in

South Africa

To lead in client-centric

wealth creation,

management and protection

Transformation

Continuous transformation is central to Sanlam’s ability to adapt to a

changing world and underpins all of the strategic pillars.

Enhancing resilience and earnings

growth through diversification

Profitable top-line growth through a

culture of client-centricity

Extracting value through innovation

and improved efficiencies

Responsible capital allocation and

management

Our strategic pillars

Executed through five clusters SEM SIG SNT SCSPF

OPERATIONAL STRUCTUREOur decentralised structure provides us with a competitive advantage

100% 100% 100% 100% 62%

Sanlam Group

Group office

Sanlam Personal

Finance

Sanlam Emerging

Markets (SPA & SSI)

Sanlam Investment

Group

Sanlam

Corporate

SA Retail: life

insurance, investment

& other financial

services

Emerging markets ex-

SA: life insurance,

general insurance,

investments, credit &

banking

SA & developed

markets: investment

management, wealth

management, credit &

structuring

SA & EM corporate:

employee benefits,

health

Santam

General insurance,

reinsurance & co-

investor in SEM

general insurance

businesses

SUSTAINABLE SHAREHOLDER VALUE CREATION

Du

al fo

cus o

n fu

ture

gro

wth

and

div

iden

d flo

ws

0

200

400

600

800

1000

1200

1400

1600

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Consistent outperformance of RoGEV target

Target Actual

0

50

100

150

200

250

300

350

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Stable dividend growth

Dividend Cash earnings

Target: SA 9yr risk free + 4% Target: 2% - 4% real growth

10yr CAGR 12.3%10yr CAGR 15.6%

India

Malaysia

PhilippinesGhana Kenya

UgandaRwandaBurundiTanzania

MalawiZambia

BotswanaNamibia

SwazilandSouth Africa

Switzerland

United Kingdom

USA

Australia

Ireland

Mozambique

MoroccoAlgeria

Tunisia

Mali

Senegal

GuineaBurkina Faso

Cote D’Ivoire

TogoBenin

NigeriaCameroon

GabonRepublic of the Congo

AngolaZimbabwe

MadagascarMauritius

Lesotho

Saudi ArabiaLebanon

Niger

Luxembourg

France

Developed Markets

Emerging Markets - Direct presence

Emerging Markets - Indirect presence

Future Expansion

Ethiopia

Egypt

AN UNMATCHED PAN-AFRICAN FOOTPRINTDiversification within Sanlam strengthens financial and operational capability

SPF (SA RETAIL) VNB MARKET SHARE

Large 5 peer

group

SANLAM

OLD MUTUAL

LIBERTY

MMI

DISCOVERY

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2013 2014 2015 2016 2017 2018 2019H1

SPF IN-FORCE POLICY NUMBERS

Entry Level Market

Middle Market

2014 - 2021

1 451 537

1 538 066

1 624 655

1 753 059

1 879 681

2 027 336

2 197 296

2 390 380

2 100 458

2 025 129

1 952 973

1 889 064

1 841 966

1 795 804

1 753 353

1 712 237

543 384

573 025

585 745

592 662

601 347

615 241

631 968

651 369

0 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000

2014

2015

2016

2017

2018

2019

2020

2021 Total: 4 753 986

Total: 4 582 617

Total: 4 438 381

Total: 4 322 994

Total: 4 234 785

Total: 4 163 373

Total: 4 136 220

Total: 4 095 379

Glacier

PROFITABILITY DRIVERS

74 88 129 138 174 263382 371 365

244 357521 618 696

-4

936

7467 62

103 98150

211

263 249 288296

287

352408

457

169 258 186198 260

280 208249

301

405 424 460410

513280

251226

20

81

120

14 5754

6785

94

127

144

187 250301

338

323

604

526473

Value of New Business per SPF Business

Glacier

BrightRock

Middle Market

Sanlam Personal Loans

Digital (MiWay Life & Indie)

Entry Level Market

PERSISTENCY IN CHALLENGING CONDITIONSSA middle income market

Lapses,

surrenders & fully

paid-ups as % of

in-force per half

year

4.8

3.9 3.9 3.6

3.4

3.8 3.9

3.0 2.9 2.9 2.8 2.9 2.9 3.0 2.9 2.7

4.2 4.0

3.8 3.7 3.6

4.2

3.4

2.9 2.8 2.7 2.9 2.8 2.8 2.9

2.7 2.7

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

H1

H2

PERSISTENCY IN CHALLENGING CONDITIONSSA lower income market

H1

H2

Sanlam Sky

(Excluding Capitec)

– NTU’s, lapses and

surrenders as % of

in-force

17.5

14.1

12.7

11.4

11.1

9.9 11

.3

11.3

10.7

10.0

10.3

10.5

16.8

14.5

12.6

11.1

10.4

11.0

10.7

10.0

11.9

10.7

10.0

-

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sanlam Group strategic focus 2020 & beyond

2

KEY PRIORITIES FOR THE GROUPSA and beyond

Entry level market

(funeral)

3rd party asset

management

Employee benefits

Health Deliver on the Pan-African opportunity via SEM &

Santam

Delivering on the Saham acquisition

Continue to accelerate market share gains in high opportunity areas

Execute on our advantage in SA

Transformation and societal impact – being the very best of what Africa has to offer

Execute on the partnership opportunities

Capitec, MTN, ARC

Competing through people

Harnessing technology through digital transformation

CAPITEC COLLABORATIONSales performance to date

12

31

47 56 59

74

60

45

74 69

75 79

88 88

102 97 96

116 113

77

-

20

40

60

80

100

120

140

May

-18

Jun

-18

Jul-

18

Au

g-18

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-19

Sep

-19

Oct

-19

No

v-19

Dec

-19

Policy sales since launch in May 2018 (in '000)

• Sales exceeded

2019 target by

40%

• 1 075 000 policies

sold in 2019

• Active book

960 000 policies

• Collections, NTU

and claims on or

better than target

INNOVATION & GROWTH

Investment Hub

Matrix Risk Cover repositioned

Sanlam Indie

DIGITAL: PORTFOLIO OF INITIATIVES

SCAN, TEST AND LEARN

NEW BUSINESS

TRANSFORMATION OF

CORE BUSINESS

Robotics

Find an intermediary

Sanlam Now Risk

Cover

Savings Goal Manager

Glacier Investment Hub

Business intelligence

Sales & marketing Operations Technology

THE SANLAM FOUNDATION

3. OPERATING ENVIRONMENT

GDP growth averages 1.5% with

periods of recession

Unemployment never falls below

25%

The interest rate increases towards

the end of the 2020s

Income inequalities skyrocket

Destructive battles within major

political parties with oppositions

forming coalitions between 2024-

2029

Key institutions are only partially

liberated and are quickly recaptured

by the newly emerging elite

Individual freedoms are becoming

curtailed

GDP growth averages 2.2% to

2030

Slow but persistent depreciation in

the rand and increasing

government debt risk

Unemployment is reduced to 22%

A growing separation of South

Africans by class and income level

Under-investment in agriculture

sees declines in food production

and security

Market-led interventions in

education, health and SOE’s

produces mixed results

GDP growth averages 4.5% to

2030 with growth becoming more

solid and predictable from 2020

onwards

Unemployment in 2030 stands at

16%

The 1st six years of education

improves, and university education

becomes more affordable

Public sector becomes more

capable and which increases trust

in key institutions

Faster urban and rural land

redistribution

Agricultural production and food

security is boosted

SOUTH AFRICA’S REALITY3 possible scenarios for 2030

A nation torn between immobility and restless

energy

A nation torn by deepening

social divides, daily protests

and cynical self-interest

A nation with an expanding

economy, social cohesion

and a renewed spirit of

constitutionalism

OPERATING ENVIRONMENTGoing forward, political will, political alignment and implementation capability will determine the SA economic

landscape

Market risk and volatility

higher

Pedestrian economic

growth, with GDP

expected at 0,8%

Eskom bail-out undoes

fiscal consolidation, with

a debt trap now possible

SOE risks remain

(SAA, Denel, PRASA,

etc.)

Risk of SARB

nationalisation remains,

but mandate intact

NHI risk to economyCurrent fiscal trajectory

not possible

Unemployment rates

increasing including high

levels of unemployed

youth

Possible VAT hike on the

cards

Moody’s downgrade now

more likely than ever

before

Revenue shortfall of

R52bn projected for the

current fiscal year

THE REALITY

• Moody’s last decision to downgrade the outlook from stable to negative• Reflects the "material risk" that the government will not stop deterioration of its

finances

• Concerned high unemployment and inequality precludes the necessary policy action

• Notes that “the 2020 budget in particular will be a key indicator of whether or not the government is committed to [fiscal consolidation]”

• Moody’s sending a strong signal that Government should stop talking about structural reform and should start implementing policy that will attract investment

• Continued inaction will likely ensure a downgrade ±March 2020• This will lead to outflows and an increase in the cost of borrowing

• Very negative for investor confidence and growth outlook

CRITICAL ACTIONS NEEDEDWhat is needed at the SONA / February Budget Speech

• Implement a blueprint to revive the economy focusing on strategic sectors and interventions.

• Key aspects and clear milestones to be covered in the plan to include:

• Security of energy supply

• Fiscal consolidation by cutting government expenditure and energy supply

• Reform SOE’s

• Government to refrain from announcing any new big policy initiatives that could further erode investor confidence

Outlook4.

LOOKING FORWARD

We believe SA is on the right path, we will not fail, but it may take time to right the ship

A slow recovery in SA will require Sanlam to up its game continuously

We have conviction that Sanlam has the required strategy and execution capability to do this

We need to benchmark ourselves against the best in the world

As Sanlam we need to lead by looking through the noise and restoring confidence

questions