JOHANNESBURG (Reuters) -South African insurer Sanlam reported a 48% jump in full-year profit on Thursday helped by better market returns on investment of premiums and higher new business volumes, and said it was taking further action to boost policy renewals.
The country’s biggest life insurer posted headline earnings per share, a measure of corporate profit in South Africa, of 7.02 rand for the year ended Dec.
31, up from 4.73 rand in 2022.
The company’s net result from financial services, which it considers a more accurate measure of profitability, grew by 18% to a record 12.4 billion rand ($660.2 million).
Sanlam attributed the performance to continued growth across business areas, with the life insurance portfolio growing by 19%, general insurance by 21%, investment management by 14%, and credit and structuring by 29%.
Net client cash flow – an important insurance metric that measures a net of all cash inflow such as premiums and investment income, and outflow such as claims paid and expenses – fell 41% to 36 billion rand, the company said.
That was due to the challenging consumer environment, which resulted in more clients cancelling insurance policies and tapping into their savings, Sanlam added.
The insurer said it was taking actions to improve its resilience in the retail mass market segment, where clients are facing affordability constraints.
“These actions may negatively impact short-term sales and value of new business in 2024 in the retail mass segment, but will ensure sustainable long-term growth,” it said.
Shares were down 2.92% at 1232 GMT.
($1 = 18.7823 rand)
(Reporting by Nqobile Dludla; editing by Jason Neely and Milla Nissi)
