55
INVESTMENT CASE Incorporating 2020 interim results
INVESTMENT CASE
Incorporating 2020 interim results
Why invest in Sanlam
Overview
The Sanlam Strategy
Operating environment for 1H2020
Financial performance – 2020 interim results
Capital management and Solvency
Cluster results – 2020 interim results
01
02
03
04
05
06
07
2
AGENDA
WHY INVEST IN SANLAM
4
We have been creating value and
contributing to financial resilience and
prosperity for more than 100 years – for all
our stakeholders.
We are well diversified: our financial
solutions meet the full individual or
organisational life cycle needs for all
financially active income groups in 44
countries.
Our strategy has remained broadly
consistent since 2003. Our purpose and
strategic pillars remain relevant and
continue to create value over the short,
medium and long term. This enabled us
to outperform our Return on Group Equity
Value (RoGEV) target since listing in
1998.
We increase our dividends in real terms
through a stable dividend policy targeting
real growth of 2% to 4% per annum over a
three-year rolling period.
Our large, stable South African base, which
contributes 67% to net result from financial
services, and mature book allows us to invest
in other high-growth, but more volatile,
territories through a partnership model.
We have a first-move advantage in
the Rest of Africa and an unmatched
Pan-African presence in 35 countries
on the continent.
Our omni-channel distribution approach
creates seamless interaction and
comprehensive support to enhance the
personal intermediary model –
encompassing more than 15 000 brokers
and advisers in the Life Business in South
Africa – with a strong direct sales capability.
WHYINVEST IN SANLAM
0
200
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1200
1400
1600
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201
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201
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Target Actual
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50
100
150
200
250
300
350
199
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201
9
Dividend Cash earnings
LONG-TERM VALUE CREATION
PERFORMANCE IN 2019
Dividend per share of
334 cents (3% real growth)
Quality of earnings
remains solid: continuation
of positive experience
variances and strong
cash flow generation
Difficult operating
environments resulting in
adjusted RoGEV per share
of 11.9%
CONSISTENT CUMULATIVE OUTPERFORMANCE
OF RoGEV TARGET
We have a dual focus on future growth and dividend flows
STABLE AND CONSISTENT
DIVIDEND GROWTH
5
10 yr
CAGR
14.8% 10 yr
CAGR
12.4%
Target: SA
9yr risk free
+4% Target: real
growth
2-4%
OUR COMPETITIVE POSITIONING INTO THE FUTURE
6
Employ some of the best and most
experienced skills in the industry
Competitive and diversified
financial solutions
Track record of responsible and
efficient capital allocationPresence in all forms of distribution
channels
Strong and trusted brand
A compelling offering through
our African footprint
Our diversification creates resilience while offering growth opportunities grounded
in our culture of client-centricity
A set of
capabilities
that enable us
to execute
effectively
Leader in BBBEE ownership in
South Africa
PAN-AFRICAN GDP GROWTH
-1
0
1
2
3
4
5
6
7
8
9
Glo
bal
EM
So
uth
Afr
ica
Eth
iopia
Côte
d’Ivoire
Rw
an
da
Se
neg
al
Bu
rkin
a F
aso
Tan
zania
Gha
na
Be
nin
Guin
ea
Ke
nya
Gam
bia
Ugan
da
Nig
er
Madag
ascar
Mali
Tog
o
Bo
tsw
ana
Mauritius
Zam
bia
Cam
ero
on
Mala
wi
Mozam
biq
ue
Zim
babw
e
Moro
cco
Tun
isia
Alg
eri
a
Cong
o
Gab
on
Nig
eria
Lesoth
o
Nam
ibia
eS
watin
i
An
gola
% y
r
2018 2019 2020
Driving accelerated organic growth over the medium to long term
7
PAN-AFRICAN INSURANCE PENETRATION
8
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
World Africa SA Namibia Botswana India Morocco Ivory Coast Kenya Ghana Nigeria
Insurance penetration as % of GDP
Life Non-Life
Leveraged organic growth over the medium to long term
THE GROWTH OPPORTUNITY
The Africa demographic dividend and insurance penetration rates across SSA
1.3
billion
people
2.5
billion
people
2019
2050
Median
age 19yrs
Exponential middle
class growth expected
41% under
15
41% live in cities
Largest &
youngest
labour
workforce by
2030
1billion by
2030
4 out of the top 10
fastest growing
economies are
African
South Africa 16.99% Uganda 0.77%
Namibia 6.69% Angola 0.71%
Lesotho 4.76% Tanzania 0.68%
Mauritius 4.18% Gambia 0.67%
Zimbabwe 4.09% Madagascar 0.67%
Kenya 2.83% Niger 0.65%
Swaziland 2.44% Sudan 0.57%
Togo 1.98% Mali 0.53%
Mozambique 1.58% Ethiopia 0.43%
Malawi 1.52% Sierra Leone 0.41%
Senegal 1.51% Eritrea 0.38%
Gabon 1.38% Burundi 0.35%
Zambia 1.11% Nigeria 0.30%
Ghana 1.10% Central A.R. 0.29%
Cameroon 1.05% D.R. Congo 0.29%
Congo 1.05% Eq. Guinea 0.21%
Benin 0.85% Chad 0.20%
Burkina Faso 0.78% Guinea 0.04%
Sources: PWC Market Research Centre
Note: The insurance penetration rate is calculated as the value written premiums (life and non-life) as a percentage of GDP 9
SANLAM MAKING A DIFFERENCE IN PEOPLE’S LIVES
There’s never been a better time
to partner with us
R540minvested in
communities
over the past
ten years
R190bn of wealth distributed in 2019:
R153bn to clients
R6,4bn to government
R7,8bn to shareholders
R13,3bn to employees and the balance to suppliers
R3,4bninvested in
B-BBEE transactions
by Sanlam
R856bnof assets under
management
by SIG
€160mmanaged in a joint venture
with the Dutch Development
Bank to mitigate against
climate change
38 yearsof retirement research via
Sanlam Benchmark Symposium
99%of death claims
paid out, maintaining
a 5-year record
R185m invested
in enterprise and
supplier development
up to 2019
10
OVERVIEWof the Sanlam Group
OVERVIEW
12
Leading financial services group in Africa, with presence in India, Malaysia and
Lebanon
Established in 1918, listed in 1998 on the JSE & Namibian Stock Exchange
2 227 million issued shares, more than 430 000 shareholders
JSE/ALSI40 index stock; top-20 based on market capitalisation
Liquidity: >50% of shares traded in 2019
Institutional shareholding of 85%, 35% offshore shareholding, 18% direct BEE
shareholding
OPERATIONAL STRUCTURE
13
Sanlam Group
Group Office
SA & Developed markets:
• Investment management
• Wealth management
• Credit & structuring
Sanlam Investment
Group
100%
• General insurance
• Reinsurance
• Co-investor in SEM
general insurance
businesses
Santam
62%
Emerging markets ex-SA:
• Life insurance
• General insurance
• Investments
• Credit & banking
Sanlam Emerging
Markets
100%
Life insurance, investment &
other financial services
• Retail Mass: entry level
market
• Retail Affluent: middle
income & affluent
markets
• Corporate: employee
benefits and health
Life & Savings
100%
FOOTPRINT
SOUTH AFRICA
OTHER EMERGING MARKETS
DEVELOPED MARKETS
LEADINGGeneral insurance, wealth management, mass
affluent and middle-income life and investments
STRATEGIC OPPORTUNITIESThird-party asset management, entry-level,
employee benefits and healthcare
PAN-AFRICAN FOOTPRINTSeek top-3 position in insurance in all key
markets to support multinational opportunity
INDIA, MALAYSIA, LEBANONStrategic diversifiers; strong performance in
India and Malaysia life; Malaysia GI lagging
NICHE PRESENCEProviding asset management and wealth
management solutions to African client base
STRATEGIC OPPORTUNITIESImproving planning and advice businesses
14
Sanlam has a unique Pan-African footprint, scale and expertise.We continue to extract synergies following the Saham acquisition in 2018 and expand our offering to multinational
companies operating across the African continent, wrapped around leading in-country businesses. Our holistic
approach ensures ease of doing business, aimed at international insurance brokers and developed market
insurers that need to provide their client base with insurance and employee benefits solutions across Africa.
EMERGING MARKETS DEVELOPED MARKETS
14
THE SANLAM STRATEGY
THE PURPOSE DEFINES WHO WE ARE
Purpose grows the value of the organisation
Strategydescribes the path you
choose
“We’ll attack the
summit via the North
Face”
“Be a Fortress in South
Africa, a pan-African
champion and
strengthen our Indian
franchise"
Purposeis why you exist, and climb
mountains in the first place
“It is not the mountain we
conquer, but ourselves”
"Empowering
generations to be
financially confident,
secure and
prosperous"
Visionis where you’re going
“We’ll summit all major
Himalayan peaks”
“To distinguish
ourselves as the most
admired financial
services company in
Africa"
Missionis what you do
“We climb mountains”
"We provide a full
range of financial
services"
© 2020 BrightHouse 16
STRATEGY AT A GLANCE
Lead with courageto earn our clients' trust
Caringthat comes from respect
for each other
Creating valuein everything that we do
VALUES THAT UNDERPIN
WHAT WE DO
17
Our visionTo become the most admired financial services group
in Africa
Enabled byData and digital transformation
Continuous development of our culture
Innovation
Partnerships
Our strategy
Becoming an African champion
Building a fortress position in
South Africa
Accelerating growth outside
of South Africa
Strengthening our position where
we operate outside of Africa
Executed through our
clusters
Emerging
Markets
SA Life
&
Savings
SantamInvestment
Group
Retail
Affluent
Retail
Mass Serve with prideas we are client focused
Winning with
integrityto be the unrivalled industry
leader in Africa
Corporate
FORTRESS SOUTH AFRICA: STRATEGIC CHANGES
4 Big Changes in responsibilities opportunities
Customer Relationships deepened:
o Low share of wallet vs benchmarko Technology enables an improvement in customer experienceo Wider product set made available to customers who have been serviced in cluster silos in a
limited mannero Integration of customer propositions possible through closer collaboration between clusters
OUTCOMES: Acquisition and maintenance unit cost reduction plus Loyalty improvement (increased persistency) = delta to VNB, VIF and value of non-life businesses
Digitalization and data usage:
o Customer journeys digitalized, including intermediary engagement o Data analyticso Simplification and rationalization of the product set and core systems
OUTCOMES: Better client experience, smarter outcomes, lower costs
Empowerment as a competitive advantage in institutional markets
Increasingly direct distribution
18
WHAT HAS NOT CHANGED?
Geographic focus largely unchanged at headline level
South Africa: Confirmed as a must be fortress for Sanlam because: cashflows essential to Group
equity story, strong market position in all segments, excellent opportunities with low risk of execution
Africa (excluding SA): Confirmed as a significant near-term and longer-term opportunity given growth
prospects for continent, low penetration, limited competition and existing position
India: 16 year investment into an excellent business built on an ecosystem, opportunity for long term
value accretion
19
AFRICA (excl. SA) STRATEGIC CHANGES
Stabilise core and grow
Reshape the portfolio
o Fewer countrieso Capital rationalization regionallyo Reduced risk profile
Drive operational execution in the core
o Focus on basics, financial controls and risk managemento Improved and disciplined business processeso Management processes and culture aligned with Sanlam business model
Volatility of investment returns reduced to focus on return on capital
Selective expansion on consistent delivery platform
20
INDIA STRATEGIC CHANGES
Strong brand in India enables insurance to be sold outside current ecosystem
Opportunity to enhance Sanlam involvement
21
STRATEGIC RISKS
22
Top-down strategic risks Trend Context
1 Covid-19 Pandemic ► External
2 Poor economic growth ► External
3 Disruptive threats / Fourth Industrial Revolution ► External
4 Cyber risk ▲ External
5 Human resource scarcity / stretched resources ▲ Internal
6 Simultaneous regulatory implementation and uncertainty ► External
7 Diversified growth initiatives ▲ Internal
8 Transformation and diversity ► Internal
9 Political and social instability ► External
10 Extreme weather / climate change ► External
The Group’s key top-down strategic risks and trends
OPERATING ENVIRONMENT in 1H2020
COVID-19 OPERATING CONTEXT
24
NEW BUSINESS
Severe disruption of life insurance sales
reliant on face-to-face interaction
Digital/direct businesses and digital sales
tools in some channels provided relief
Monthly sales improved as roll-out of
digital tools accelerated
Accelerated digitisation of client and
intermediary journeys required
CREDIT RISK
Widening in credit spreads, in particular
listed corporate debt
Restrictions on economic activity
increasing credit risk
Increase in doubtful debt provisions; first
corporate default
Indulgences & payment relief granted to
assist clients through lockdowns
OPERATIONS
Responded rapidly to work-from-home
requirement with no significant disruption of
back-office operations
Risk management processes (e.g. liquidity)
responded as expected
Solvency remained strong through worst of turmoil
Need to accelerate digitisation of processes
Substantial assistance to clients, intermediaries
and society in general
INVESTMENT MARKETS
Severe volatility in equity, interest rate and
currency markets
Share prices of Indian credit businesses under
further pressure
Further weakening in Lebanon economic
environment/increase in sovereign risk
Negative impact on fund fees, investment return
on capital and return on GI insurance funds
Credit
spreads
Credit
risk
Exchange
rate
volatility
Restrictions
on
movement
Recessions
Investment
market
volatility
GDP GROWTH RELATIVE TO THE WORLD
Sanlam Operating Environment
Sources: IMF, Focus Economics Consensus, Sanlam25
OPERATING AND UNDERWRITING ENVIRONMENT
26
13.3%16.1%
6.4%
14.3%
-30.0%
10.5%13.1%
-35%
-25%
-15%
-5%
5%
15%
25%
UnitedKingdom
USA Botswana Morocco Angola India Malaysia
Average Rand exchange rates (% change)
9 000
9 500
10 000
10 500
11 000
11 500
12 000
12 500
13 000
13 500
14 000
44 000
46 000
48 000
50 000
52 000
54 000
56 000
58 000
60 000
Dec-18 Jun-19 Dec-19 Jun-20
JSE indices
All Share - lhs Swix - rhs Avg Swix - rhs
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
12.0%
Dec-18 Jun-19 Dec-19 Jun-20
SA bond yields & short-term interest rates
9 year 5 year Avg ST
- 800
- 600
- 400
- 200
-
200
400
600
800
1 000
1 200
Santam underwriting result (R million)
1H19 1H20
-4% VNB
-3% RoGEV
4.3%
GI
UNDERWRITING
Santam
underwriting
margin
7.0% SEM
underwriting
margin
+1%
EXCHANGE
RATES
Net result from
financial services
+5% RoGEV
ECONOMIC
BASIS
INVESTMENT
RETURN
-R1.5bnEV investment
variances
Return on SEM
GI insurance
funds1.7%
FINANCIAL PERFORMANCE2020 interim results
We delivered a
resilient operational
performance in one of
the most challenging
periods ever faced
COVID-19 severely
impacted all key
performance indicators
Our prudent approach
served us well during the
turbulent conditions
We are well positioned for
future growth
PERFORMANCE SCORECARD FOR 1H2020
✓
Resilient through COVID-19, more than R2bn relief
provided to clients✓
New business volumes and net fund inflows
increased by 40% and 44% respectively✓
Strong recovery in Saham underwriting
performance
✓
Quality of earnings: Continued positive
experience variances and resilient persistency
despite difficult operating conditions
✓
Value through partnerships and
innovation: Capitec Bank funeral sales
up 9%; Indie/MiWayLife up 80%
Growth in net result from financial services
reduced from 18% to -22% by COVID-19
Investment return (large impact on Saham
float), credit provisions in SPL/India/Lebanon,
credit spreads – more than R3bn earnings
impact
Lower life new business -29% decline
in VNB
28
✓
Updated strategy approved by Board in
August 2020
✓ARC Financial Services investment in SA 3rd party
asset manager announced, subject to conditions
precedent
Impairments of R7.6 billion; R1.5bn
impact on net asset value after FCTR
RoGEV and adjusted RoGEV per share
underperform against hurdle
CBI uncertainty at Santam; mitigated
by R1bn relief to clients
R3bnCOVID-19 impact
on operations
GROUP EQUITY VALUE
BUSINESS VOLUMES
INTERIM 2020: KEY PERFORMANCE INDICATORS
EARNINGS
-39%net operational
earnings
COVID-19 impact on investment market returns, credit spreads, doubtful debt
provisions and relief offered to clients and intermediaries
18% growth in net result from financial services excluding earnings components
impacted by COVID-19
Strong recovery in SEM GI underwriting performance
Improvement in Sanlam Corporate risk claims experience persisted into 2020
+40% to R157bn
new business
volumes
-29%to R666m
net value of new
covered business
2.06%net new covered
business margin
R58,08GEV per share
-4.6%RoGEV per share (adjusted -0.9%
compared to hurdle of 6.4%)
-22%net result from
financial services
29
RoGEV negatively impacted by prudent valuation approach applied to all
businesses in light of COVID-19 uncertainty
Economic growth, future investment return and top-line growth
assumptions reduced across the board
Significant decline in listed share prices of Indian credit businesses
Negative return on listed Santam share (in line with lower financial index)
Strong overall growth despite severe impact of COVID-19 on life business,
supported by investment flows at SIG, SEM and Sanlam Corporate
Net fund inflows increased by 44% to R33bn, with solid growth in all lines
of business
Former Saham businesses in Africa exceeding targets
VNB down 29% due to gearing to lower new business volumes
Net result from financial
services New business volumes VNB
R million 2020 2019 Var 2020 2019 Var 2020 2019 Var
Sanlam Personal Finance 2 005 2 290 -12% 30 290 28 153 8% 518 723 -28%
Sanlam Emerging Markets 985 1 363 -28% 21 890 16 236 35% 133 176 -24%
Sanlam Investment Group 127 559 -77% 88 617 52 583 68% - - -
Santam 396 501 -21% 11 922 11 773 1% - - -
Sanlam Corporate 352 254 39% 4 761 3 357 42% 15 43 -65%
Group Office & other 33 1 >100% - - - - - -
Sanlam Group 3 898 4 968 -22% 157 480 112 102 40% 666 942 -29%
Excl COVID-19 5 523 4 693 18%
30
CLUSTER CONTRIBUTIONS
RETURN ON GROUP EQUITY VALUE
SALIENT FEATURES
COVID-19
Negative investment
variances
Strengthening of
economic and
operating
assumptions
Lebanon valuations
reduced to zero
Lower listed share
prices: Santam, India
and AfroCentric
Partly offset by foreign
currency translation
gains
Operating assumption
changes also causing
underperformance in
adjusted RoGEV
12.114.1 13.2 13.0 13.5
6.5 6.4
0.7
-2.3
1.6
-1.4
-7.1
-1.1
-11.0
- 12
- 8
- 4
0
4
8
12
16
2015 2016 2017 2018 2019 1H19 1H20
Target Out/(under) performance
12.114.1 13.2 13.0 13.5
6.5 6.4
2.7
3.72.6
6.4
-1.6 -1.9
-7.3
- 8
- 6
- 4
- 2
0
2
4
6
8
10
12
14
16
18
20
2015 2016 2017 2018 2019 1H19 1H20
Target Out/(under) performance
Growth target of long-bond rate +400bp
31
RoGEV (%) Adjusted RoGEV (%)
Avg
GROUP EQUITY VALUE EARNINGS
SALIENT FEATURES
Life: continued positive
operating experience
variances offset by lower
VNB and negative
investment variances,
economic assumption
changes and
persistency/expense
assumption changes
Non-life: current period
investment variances,
lower future investment
returns, net fund inflows
and GI premium growth
Forex and other includes
exchange rate differences
of R6.5bn and FBN
goodwill write-of of
R700m
32
-0.6% -4.3%
44
27
11
13
6 -1
SPF SEM SIG SNT SC Discretionary capital and other
33
28
14
14
47
SANLAM 2019: DIVERSIFICATION
Cluster analysis of
net result from financial services
and contribution to GEVGeographic analysis
Contribution to Group net result
from financial services (%)
Contribution to
Group Equity Value (%)
67
9
61
152
South Africa Other Southern Africa North and West Africa
East Africa Other emerging markets Developed markets
Net result from financial services (%)
South Africa
still dominates
SPF still
dominates
GEV (%)
645
15
18
7
33
CAPITAL MANAGEMENT AND SOLVENCY
DISCRETIONARY CAPITAL
SALIENT FEATURES
Acquisition of remaining
65% stake in Nigeria
operations concluded
Fully funded through
debt to facilitate
introduction of new
majority partner
No other significant
movements in 1H2020
Substantial funding
sources available
Disposal of non-core
investments
Debt exposure well
below peers
IFRS17 releases
Excess investment
return
35
SOLVENCY POSITION
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
Sanlam Life 31/12/2019 Sanlam Life 30/06/2020 Sanlam Life covered31/12/2019
Sanlam Life covered30/06/2020
Sanlam Group 31/12/2019 Sanlam Group 30/06/2020
SAM solvency cover (R million)
Own funds SCR
Target range: 170% - 210%
36
SALIENT FEATURES
Strength of Sanlam
balance sheet evident
throughout COVID-19
turbulence
Sanlam Life covered
business solvency cover
remains towards upper
end of target range –
reflective of prudence in
valuation of liabilities
Decline in Group
solvency ratio largely
attributable to dividend
payment and lower
Sanlam Life cover ratio
272%253%
206% 206%
211%187%
201%
DIVIDEND
37
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2018 2019
Dividend as % of net result from financial services
Sanlam Personal Finance Sanlam Emerging Markets Sanlam Investment Group Santam
Sanlam Corporate Group office Sanlam Group
Cash dividend generation
LATEST OPERATIONAL TRENDS
• YTD mortality experience
• 2020 Net Monthly Claim Amounts up to end September
Jan Feb Mar Apr May Jun Jul Aug Sep
SPF Underwritten SPF Non-Underwritten Sanlam Corporate
Overall experience for 1H2020 was favourable across most business lines, with positive GEV risk variances
From June marked increases observed across business lines not explained by the increase in COVID claims
alone, likely due to under-reporting of COVID deaths and collateral impact of the pandemic (e.g. lockdown
measures)
Claim frequencies seems to have peaked in July and have since fallen for consecutive months
39
• Excess claims
• Expected to be offset by risk variances and releases from annuity business. Pandemic reserve of R760 million available if needed
Jun Jul Aug Sep
SPF Underwritten SPF Non-Underwritten Sanlam Corporate
40
• Persistency – Sanlam Life
41
• Premium Holidays were introduced
to preserve persistency. High uptake
during April & May with the number
of premium holidays granted
reducing substantially post June.
• Circa 87% of SIL risk policies with
Premium Holidays successfully
reinstated since August.
ANNEXURECLUSTER RESULTS2020 interim results
SANLAM PERSONAL FINANCE
R1 061mSanlam Sky
-14%
R1 531mRecurring premiums
& SBD
-11%
R27 698mGlacier
+10%
+80%Sanlam Indie
and MiWayLife
+9%Capitec
funeral new
business
43
CLUSTER PERFORMANCE SPF
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2016 2017 2018 2019 2020
New business volumes (R million)
Sanlam Sky Recurring premium Glacier
-4 000
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
2016 2017 2018 2019 2020
Net flows (R million)
Sanlam Sky Recurring premium Glacier
+8% 2020
-0.4%CAGR
+85% 2020
-6%CAGR
SALIENT FEATURES
Good demand for
annuities, international
products and money
market funds at Glacier
Traditional distribution
channels in Sanlam Sky
and Recurring Premium
sub-cluster severely
impacted by lack of
face-to-face sales
Digital & direct channels
doing well – Sanlam Indie,
MiWayLife, Capitec Bank,
Sanlam Direct
Accelerated adoption of
digital tools driving
monthly improvement in
sales volumes
0
500
1 000
1 500
2 000
2 500
2016 2017 2018 2019 2020
Net result from financial services (R million)
Sanlam Sky Recurring premium Glacier SBD & other
129203 244
329
169
251 109
160
216
156
119 273
218
178
193
0
100
200
300
400
500
600
700
800
2016 2017 2018 2019 2020
Net value of new life business (R million)
Sanlam Sky Recurring premium Glacier
SALIENT FEATURES
44
SANLAM PERSONAL FINANCECLUSTER PERFORMANCE
2.35%Compared to
3.14% in 2019
Sanlam Sky 5.24%
Recurring premium 2.74%
Glacier 1.48%
Net new business margin
2020 2019
RoGEV -0.9% 11.5%
SPF
+2%
-4%
-18%
-75%
-28% 2020
+1%CAGR
-12% to R2 005 m
-1%CAGR
SALIENT FEATURES
VNB
Geared impact of lower
new life business
volumes
Capitec Bank in line with
target
Net result from financial
services
Up 6% excluding COVID-
19 and prior year tax
adjustment at SPL
Continued positive
experience variances,
including risk experience
Resilient persistency
experience
Pandemic reserve can
absorb COVID-19 claims
R10.1bnSouthern
+41%
R6.9bnNorth & West
+11%
R2.2bnOther
+8%
R2.6bnEast
+246%
SALIENT FEATURES
Large new investment
mandates in Namibia and
Botswana; welcome
improvement in Kenya
General insurance
business exceeded target
for the period
Saham GI up 10% despite
COVID-19 lockdowns and
focus on quality
Lower life insurance sales
across most markets due
to lockdowns and curfews
– overall decline of 11%
+13%General
insurance
+54%Life &
investments
SEM
SANLAM EMERGING MARKETS
45
CLUSTER PERFORMANCE
0
5 000
10 000
15 000
20 000
25 000
2016 2017 2018 2019 2020
New business volumes (R million)
Life insurance General insurance Investments
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
2016 2017 2018 2019 2020
Net fund flows (R million)
Life insurance General insurance Investments
+35% 2020
+27%CAGR
+67% 2020
+40%CAGR
SALIENT FEATURES
VNB
Lower new life business
volumes
Change in mix of business
in Namibia
Lower interest rates in
North and West Africa
reducing product margins
Net result from financial
services
Up 27% excluding
COVID-19
GI underwriting margin
improved to 7% (Africa
6.1%; Saham 7.6%)
Negative investment
return on insurance funds
in Morocco and Côte
d’Ivoire
Increase in retail credit
provisions
2020 2019
RoGEV -6.6% -0.4%
- 400
- 200
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2016 2017 2018 2019 2020
Net result from financial services
(R million)
Life insurance General insurance Credit Other
0
20
40
60
80
100
120
140
160
180
200
2016 2017 2018 2019 2020
Net value of new life business (R million)
Other international Other African countries
Botswana Namibia
46
SANLAM EMERGING MARKETSCLUSTER PERFORMANCE
SEM
2.58%Compared to
3.43% in 2019
Southern Africa 4.94%
North and West Africa 0.99%
East Africa 1.45%
Other international 1.50%
Net new business margin
-24% 2020
-7%CAGR
-28% 2020
+6%CAGR
47
SANLAM EMERGING MARKETSCLUSTER PERFORMANCE
SEM
Net new business margin
Gross written
premium
Underwriting
margin
Return on
insurance funds
R million 2020
%
change 2020 2019 2020 2019
Southern Africa 1 919 13% 23.5% 12.4% 2.7% 4.0%
North and West Africa 8 441 19% 4.1% 1.3% -4.3% 13.2%
East Africa 850 14% -7.7% -4.8% 7.9% 5.9%
Other international 2 041 11% 10.9% 19.1% 20.1% 24.7%
Total 13 251 16% 7.0% 5.5% 1.7% 13.7%
Saham 10 437 17% 7.6% 2.3% -2.8% 12.1%
Other 2 814 13% 4.5% 17.3% 17.3% 19.7%
Total 13 251 16% 7.0% 5.5% 1.7% 13.7%
General insurance and reinsurance result
SALIENT FEATURES
Saham underwriting margin within target range of 5% - 9%
Improved underwriting result across most markets
Morocco motor book benefiting from lockdown
Absence of large catastrophe claims, apart from fire claims in Côte d’Ivoire
Improvement in Angola motor and health
Saham return on insurance funds below 6% - 9% target range
Decline in India from high comparative base
48
SANLAM EMERGING MARKETSCLUSTER PERFORMANCE
SEM
Net new business margin
General insurance ratios – June 2020100% view)
% of NEP Santam SEM other Saham
Net earned premium 100.0 100.0 100.0
Net claims incurred 65.5 55.4 58.5
Net acquisition cost 30.2 40.1 33.9
Net underwriting margin 4.3 4.5 7.6
Investment return on insurance funds 2.3 17.3 -2.8
Net insurance margin 6.6 21.8 4.8
Target underwriting margin 4% to 8% 5% to 9%
Target return on insurance funds margin 2.5% 6% to 9%
SALIENT FEATURES
Saham and Shriram
General Insurance
exposed to longer tail
lines of business –
return on float more
pronounced portion
of GI earnings
Lower equity and
property valuations
impacted Saham
returns in 2020
Strategic asset
allocation of float
continuously
reviewed to optimise
return
49
SANLAM EMERGING MARKETSCLUSTER PERFORMANCE
SEM
Net new business margin
R million 2020
Saham 5 780
Premium paid at acquisition 2 712
Lebanon write-off to zero 1 995
Future economic growth and investment return assumptions 1 928
Utilisation of hedge reserve (855)
Shriram Capital 1 562
Shriram City Union Finance 1 001
Shriram Transport Finance Company 561
Other operations 233
Total 7 575
SEM 7 131
Santam 444
Impairment of SEM operations
SALIENT FEATURES
Saham
Lebanon written off
in light of prevailing
economic
environment
Valuation of other
Saham businesses
and premium
reduced due to
COVID-19
Shriram Capital
Prudent valuation
approach - reduced
to net asset value
In line with lower
listed prices of STFC
and SCUF
SANLAM INVESTMENT GROUP
SALIENT FEATURES
SA equity markets
and GDP
unsupportive of
growth for a number
of years
International and
asset class
diversification
provided resilience
Diligent cost
management
remains a priority
50
10 000
11 000
12 000
13 000
14 000
15 000
44 000
46 000
48 000
50 000
52 000
54 000
56 000
58 000
60 000
Dec-1
4
Jun-1
5
Dec-1
5
Jun-1
6
Dec-1
6
Jun-1
7
Dec-1
7
Jun-1
8
Dec-1
8
Jun-1
9
Dec-1
9
Sw
ixAll
Sh
are
JSE indices
All Share
Swix
Avg Swix
SIGSIGCLUSTER RESULTS
SANLAM INVESTMENT GROUP
51
CLUSTER PERFORMANCE SIG
-4 000
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2016 2017 2018 2019 2020
Net investment business flows (R million)
International
Wealth Management
Investment Management SA
- 300
- 200
- 100
0
100
200
300
400
500
600
700
2016 2017 2018 2019 2020
Net result from financial services
(R million)
Sanfin
International
Wealth Management
Investment Management SA
SALIENT FEATURES
Net fund flows
Strong SA institutional
inflows offset by lower
retail net flows; abnormal
level of retail asset
allocation changes
Turnaround in Wealth
Management
Net result from financial
services
Up 4% excluding
COVID-19
SA Investments up 14%
on comparable basis;
strong performance fees,
net inflows at SMM and
Satrix, cost control
Increased brokerage in
Wealth Management
2020 2019
RoGEV -9.5% 5.5%
+9% 2020
+14%CAGR
-77% 2020
-32%CAGR
SALIENT FEATURES
Gross written premiums
for conventional business
grew by only 4% due to
premium relief to clients
4.3% underwriting margin
for conventional business
impacted by CBI claims
provision
Net result from financial
services more than doubled
excluding COVID-19
SANTAM
52
CLUSTER PERFORMANCESNT
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
2016 2017 2018 2019 2020
Gross written premiums (R million)
0
100
200
300
400
500
600
700
2016 2017 2018 2019 2020
Net result from financial services
(R million)
2020 2019
RoGEV -5.2% 3.4%
1H2020 4.3%
2019 7.7%
2018 9.2%
2017 6.0%
2016 6.5%
Underwriting margin – conventional business
+7% 2020
+11%CAGR
-21% 2020
+1%CAGR
SANLAM CORPORATE
SALIENT FEATURES
New business
Strong growth in lower
margin investment and
life single premiums
Recurring premiums
down 29%
VNB gearing more
pronounced due to
lower margins
Net result from financial
services
Improvement in risk
claims experience
persisted; more than
doubling in risk profit
Solid growth in admin
and health profits
Pandemic reserve can
absorb COVID-19
claims 53
CLUSTER PERFORMANCESC
0
5
10
15
20
25
30
35
40
45
50
2016 2017 2018 2019 2020
Value of new life business (R million)
0
50
100
150
200
250
300
350
400
2016 2017 2018 2019 2020
Net result from financial services
(R million)
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2016 2017 2018 2019 2020
New business volumes (R million)
Life insurance Investments
2020 2019
Net new business margin 0.42% 1.11%
2020 2019
RoGEV -0.4% 8.2%
+42% 2020
+22%CAGR
+39% 2020
+17%CAGR
-65% 2020
8%CAGR
SANLAM ADR PROGRAMME
Sponsored level 1 ADR
• Ticker symbol: SLLDY
• CUSIP: 80104Q208
• Ratio: 1 ADR : 2 Ordinary Shares
• Depositary bank: JP Morgan Chase Bank, N.A.
• Depositary bank contact: Charles E. Heming
• General Broker Enquiries: +1 212 552 8926(US)
• e-mail: [email protected]
• ADR website: www.adr.com
• Depositary bank’s local custodian: Standard Bank of South Africa
54
