Sanlam CEO talks results, COVID-19 impact on business & outlook for the industry
Sanlam, Africa's biggest insurance company reported record new business volumes as key financial performance metrics returned to pre-Covid levels. The group increased its dividend by more than double the inflation rate, saying it sees opportunities for growth in the rest of the continent where insurance take up levels remain among some of the lowest in the world. Sanlam CEO, Paul Hanratty joins CNBC Africa to talk about the results.
Thu, 10 Mar 2022 11:05:05 GMT
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AI Generated Summary
- Sanlam attributes the surge in new business volumes to increased savings rates post-pandemic and strategic investments in growth initiatives like the MTN partnership.
- The company's strong financial performance in 2021 was supported by volume growth, efficient expense management, and operational scalability across the African continent.
- Despite inflation risks and the impact of COVID-19 on mortality claims and business continuity, Sanlam remains confident in its ability to navigate economic uncertainties and drive long-term wealth management strategies.
Sanlam, Africa's largest insurance company, has reported record new business volumes, with key financial performance metrics returning to pre-COVID levels. The group saw a significant increase in dividend by more than double the inflation rate, highlighting its optimism for growth opportunities in regions where insurance uptake remains low. Sanlam CEO, Paul Hanratty, discussed these results in an exclusive interview with CNBC Africa. Hanratty attributed the surge in new business volumes to a rise in savings rates following the pandemic. He noted that people were unable to spend as much money on consumables during lockdowns, leading to increased investments. Despite the strong performance in 2021, Hanratty remains cautious about future projections, expecting slightly lower growth in new business while emphasizing the company's long-term growth strategies. One of the key initiatives driving future growth is the partnership with MTN, among other acquisitions, which are set to boost the company's performance in the coming years. Hanratty clarified that these initiatives were not reflected in the 2021 results and are expected to contribute significantly to future business. The notable 44% increase in the value of new business was primarily driven by volume growth and efficient expense management. Sanlam's scale benefits and operational efficiency enabled profitable growth, positioning the company strategically for further expansion across the continent. With concerns around global inflation levels, Hanratty acknowledged the potential short-term impact on consumer spending but highlighted the company's resilient business model, largely shielded against inflation risks. As central banks navigate economic challenges, Hanratty expressed confidence in Sanlam's ability to manage potential downturns by focusing on long-term wealth management strategies. The CEO emphasized the importance of understanding 'stock and flow' effects in dealing with inflation, pointing out the advantages of inflation-proof asset management for long-term business sustainability. Addressing the impact of COVID-19, Hanratty revealed the substantial rise in mortality claims and business continuity insurance payments due to the pandemic. Despite the financial challenges posed by COVID-19, Sanlam's robust capitalization and prudent financial management helped mitigate the adverse effects on the business. Looking ahead, Hanratty highlighted the lasting changes brought about by the pandemic within the insurance industry. He emphasized the shift towards digitalization, increased efficiency, and enhanced customer interactions as crucial elements reshaping the future of insurance. The CEO stressed the industry's role in helping individuals navigate uncertainties and plan for their financial security, underscoring the importance of adapting to evolving customer needs in a volatile global landscape. Sanlam remains optimistic about its long-term growth prospects, driven by a strategic vision to deliver value and resilience amidst changing market dynamics.