Sanlam – South African Financial Services Group

Sanlam
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Sanlam has developed leading consumer internet insurance companies that enhance people’s capabilities and enrich society through international operations and general insurance products in South African markets with long-term growth potential. Sanlam was founded in 1918 and had a long history. Over the years, the group has evolved from a traditional insurance company to a diversified financial service provider with local and international businesses.

About Sanlam

Sanlam (JSE: SLM) is a South African financial services group based in Bellville, Western Cape, South Africa. It is the largest insurance company in Africa and is listed on the Johannesburg share exchange, Namibia shares exchange, and A2x. a life insurance company founded in 1918, Sanlam group has developed into diversified financial services company. Its five business units include Sanlam personal finance, Sanlam emerging markets, Sanlam Investments, Sanlam corporate and Sanlam.

The group’s business includes insurance (life and general insurance), financial plans, pensions, trusts, wills, short-term insurance, asset management, risk management, capital market activities, investment, and inheritance. Namibia, Botswana, Swaziland, Zimbabwe, Mauritius, Malawi, Zambia, Tanzania, Rwanda, Uganda, Kenya, Ghana, Nigeria, Mozambique, India, Malaysia, and the United Kingdom have commercial interests in the United States, Australia, Burundi, Lesotho and the Philippines.

It has a stake in Micro-Secure Holdings limited, a micro-insurance specialist in the United Kingdom, which has operations in Africa and India and serves more than 10 million registered customers. It acquired Saham Finances in 2018, making it the largest non-bank financial services company in Africa, and set foot in Morocco, Angola, Algeria, Tunisia, Niger, Mali, Senegal, Guinea, Burkina Faso, Cote d’côte d’Ivoire, Togo, Benin, Cameroon, Gabon, Republic of Congo, Madagascar, Lebanon and Saudi Arabia. The Sanlam life committee has the following units:

  • Audit, actuaries, and finance
  • Risk and compliance
  • People and compensation

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Sanlam IPO

Sanlam Ltd., one of South Africa’s largest insurance companies, is listed on the Johannesburg Shares Exchange, the largest initial public offering in the country’s history. The listing is hailed as a landmark experiment to bring the benefits of capitalism to impoverished Africa.

Sanlam was transformed from a joint venture to a public limited company, delivering approximately R12 billion ($ 2.1 billion) in shares of more than 2.3 million policyholders to South Africa. The number of shareholders almost tripled. These shares are listed alongside the R4 billion shares sold in the public offering. Shares opened at the opening price of six rands, peaked at 6.12 ($ 1.07) in the first few minutes of trading, fell to a low of 5.92, and finally closed at 5.99. Newly listed products occupy a dominant position in the market and represent approximately 36% of the total volume of transactions.

Despite the commercial activity, traders said Sanlam’s listing was disappointing. Some people expected Sanlam’s share price to close between R7-9 on the first day of trading because the share was oversubscribed three times. Founded in 1918, Sanlam was originally a company that provided insurance to the main poor white Afrikaners. In the six months ending June 30, its premium income was approximately $ 2 billion. When it came to the Johannesburg Share Exchange, it was the 17th largest company on the Johannesburg Shares Exchange by market value.

It is widely expected that the conversion of Sanlam and its larger competitor Old Mutual, which is scheduled to the takeaway public sometime next year, will provide the South African economy with the required boost when many policyholders cash in on their shares.

Sanlam Investments

The company is divided into eight business units: life insurance, funeral cover, retirement annuity, tax-free savings, unit trusts, personal loans, credit profiles, and online will.

Benefit management

Sanlam Investment Management (SIM) — manages institutional portfolios and retail collective investment (unit trust) funds

  • Sanlam Structured Solutions — structured merchandise

Multi-management

Sanlam Multi-Manager International (SMMI) — investment management consolatory business

Alternative investments

Blue Ink — hedge fund manager, specializing in each the native and world investment markets

Sanlam various Investments — focuses on the change of integrity of positive investment returns, not to mention drawback protection ways to come up with wealth for retail and institutional purchasers

Sanlam continent Investments — with a presence in thirteen African countries, Sanlam continent Investments permits investors to capitalize on African growth opportunities by success sourcing and managing investments across a spread of plus categories.

Passive investments

Satrix — offers investors straightforward, value-effective access to the markets through a good variety of passively managed investment merchandise

Capital management

Capital management — manages parts of Sanlam’s third-party and policyholders’ funds

  • Sanlam Capital Markets (SCM)
  • Sanlam non-public Equity (SPE)

Employee edges

Sanlam worker edges — Provides risk and investment administration services to establishments and retirement funds

  • Sanlam cluster Risk (SGR)
  • Sanlam worker edges Investments (SEB Investments)
  • Sanlam Umbrella Solutions (SUS)
  • Sanlam superannuation Administration (RFA)
  • Simek Consultants and Actuaries

Wealth management

Sanlam non-public Wealth (SPW) — non-public consumer wealth management and stockbroking

  • Calibre Investments — fifty.1% — Australian investment management
  • Sanlam non-public Investments GB — ninety-seven — GB non-public wealth management and stockbroking
  • Summit Trust — sixty-fifth — International freelance trust services cluster in the European nation
  • Investment consolatory Services and Fiduciary and Tax services.

Sanlam Business strategy

Sanlam’s strategy is structured around four strategic pillars. Their commitment to Africa is the cornerstone of their strategic positioning, and their vision is to become the most esteemed financial services company in Africa.

Sanlam Stock Analysis

For the financial year ended December 31 2020, Sanlam’s revenues decreased 10% to 132.8 bn. Net income decreased 60% to 2.86 bn. Revenues reflect investment income decrease of 3% to 31.88 bn. Net income also reflects impairment goodwill increase from 26 mn to 5.03 bn (expense ), impairment of investments increase from 338 mn to 1.9 bn (expense ), sales remuneration increase of 8% to 14.32 bn (expense ). The latest indifference towards the little value fluctuations of Sanlam might encourage shareholders to require a better cross-bill of the entity because it is traded at a share value of zero on terribly low momentum in a trading volume. The corporate executives didn’t add any price to Sanlam Ltd RC investors in April 2021. However, most investors will still diversify their portfolios with Sanlam to hedge their inheritable risk against high-volatility market eventualities. The share variance of daily returns for ninety days, the investment horizon is presently terribly low. The little share volatility may be a sensible signal to shareholders with longer-term investment horizons.

Bottom Line

Listing in Amsterdam will provide global investors, especially South African investors, with an opportunity to gain a broader understanding of the company, increase the company’s value, and reduce corporate group discounts. The company may need to create a win-win situation that can attract South African investors until that happens.

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