Sanlam CEO on H1 results & how COVID-19 has impacted the business

South African financial services group, Sanlam, has announced a strong profit in the first half of the year, despite facing challenges due to the COVID-19 pandemic. The group reported a net operational earnings decrease of 39 per cent and a net result from financial services decline of 22 per cent, attributed to the downturn in equity markets in its largest markets. However, Sanlam saw an increase in new business volumes of 40 per cent, driven primarily by its emerging markets. The CEO of Sanlam, Paul Hanratty, joined CNBC Africa to discuss the company's performance and future strategies. Hanratty clarified that while the direct impacts of COVID-19 have reduced the group's earnings by three billion rand, Sanlam has posted an extremely strong profit number for the current half-year. The company made provisions for impairments totaling 7.6 billion rand on its balance sheet, mainly related to its Indian business and the acquisition of Saham in Africa. The impairments were made due to the impact of repayment holidays imposed by the Indian regulator and challenging economic conditions in Lebanon, affecting the value of the assets. Hanratty expressed confidence in the current asset valuations, provided there is no further deterioration in economic conditions. Despite the challenges in the market, Hanratty remains optimistic about the future of the business. He highlighted the strong growth in new business volumes, particularly in the investment business, which has remained resilient during the pandemic. The short-term or general insurance business across Africa has also shown solid performance, while the life insurance business has faced challenges in acquiring new business due to lockdown restrictions. Sanlam has adapted to the changing environment by enabling intermediaries to interact with clients through digital platforms, leading to a strong recovery in the life insurance business. Hanratty emphasized the importance of diversification across different lines of business to ensure the company's overall strength and growth prospects. Looking ahead, Sanlam is focused on accelerating growth outside of South Africa and capitalizing on opportunities in emerging markets. The company's strategic review aims to drive expansion and profitability in diverse regions, leveraging its established presence and expertise in the financial services sector. In conclusion, despite the challenges posed by COVID-19 and market uncertainties, Sanlam's resilience and strategic focus have positioned the company for sustainable growth and success in the coming year.