African leader Sanram goes hunting again-June Afrique

Returning to pre-pandemic profit levels, South Africa’s leading insurers confirm the continent’s appetite.

In 2021, Sanlam gave himself a way to pursue his ambitions to strengthen his footsteps across the African continent. Despite the surge in mortality associated with Covid-19 (billed Rand 4.2 billion, around € 232.4 million as of December 31, South African giants “one year ahead” of expectations, The year ended with solid performance.

Created a special pandemic reserve

Last year’s sales reached R2200 billion (compared to Rand 133 billion in 2020). This is the highest level since the acquisition of Morocco’s first rival, Saham, in 2018 (second only to South African colleagues). The operation certainly surpassed the revenue of the Cape Town colossal statue by Rand 100 billion, which was previously only intermittently approached. Thus, with a profit of R11.35 billion (€ 628 million as of December 31), a major African insurer lowered this indicator to just Rand 1.4 billion before the Covid-19 crisis. It is regaining its shape. Shareholders will be even more satisfied with the net income group’s share of R $ 9.47 billion, 13 times that of 2020.

Review pricing policy and reserves

Listing the key indicators that contributed to these results, Paul Hanrati, Group CEO since 2020, elaborated on the reasons for such performance on March 11. After a difficult year for insurers to operate in 2020 due to strict containment measures, the Group has been working to restore the level of performance to pre-pandemic levels in 2021. “He announced in a presentation. Investor.

For good reason, Sanlam has begun a complete overhaul of its price structure and products. “We have also created a’pandemic special reserve’that applies to retail life insurance and, on the contrary, have released certain historical reserves that are no longer suitable for our business,” said Paul Hanrati.

Redistribution of reserves will allow to offset losses associated with high levels of mortality, especially in 2021, and should lead to future losses due to the limited pandemic.

Moroccan correction

Outside the boundaries of South Africa’s “fortress market,” Sanlam has at the same time resumed an ambitious program to strengthen and strengthen its position. Especially for major acquisitions in recent years, the 2021 Saham Finances Group had the opportunity to close the “Impairment of Acquisitions” file.

In fact, in 2020, Sanlam had to provide an impairment cost of nearly R8 billion, primarily in connection with the 2018 acquisition of the Moroccan flagship, founded by Moulay Hafid Elalamy. This operation cut off more than one-third of South Africa’s operating profit. The first half of 2020.This impairment reassessment was carried out by the Group as of 31 December 2021 and finally, according to Sanlam’s calculations, “value in use”. [qui donne une estimation de la valeur de marché de Saham Finances, ndlr] No further impairment is required as it is greater than the carrying amount. “

Target 50 million customers by 2025

Since being renamed Sanlam Pan Africa (SPA) Non-Life, the activity of former Moroccan assets has been particularly boosted by the strong profitability of last year’s stock market investments. However, due to an unusual level of claims in Côte d’Ivoire, the branch’s insurance policy net profit margin (4%) is below the target of 5-9% and below the 2020 result (6.1%). ..

Pan African expansion

2021 was also characterized by the resumption of the acquisition by Sanlam. On the continent, the insurance group has announced the creation of a strategic alliance with MTN in insurance companies. “This agreement is expected to help improve consumer financial inclusion, which is currently not reached by traditional distribution channels, and help Sanlam reach its goal of 50 million customers by 2025. [contre environ 10 millions de clients aujourd’hui] “Paul Hanrati said. MTN, Africa’s leading telecommunications group, has more than 270 million subscribers worldwide.

In addition, South African insurers have entered into a share repurchase agreement (with a long term of 31 December 2021 and extended to 31 March 2022) to sell all shares held in San Lam Guinea, San Lam Congo and San Lam Gabon. I signed it. Transfer Vie and Sanlam TogoVie to NSIA and acquire all shares held by NSIA in NSIA Vie Mali and NSIA Mali. This mutual transaction will actually be completed by the end of March and will require regulatory approval from CEMAC and South African authorities.

In terms of outlook, Sanlam continues to explore options aimed at “optimizing (our) pan-African portfolio by strengthening its position in key markets and abandoning small businesses.” .. A strategic agreement between insurance giants is under discussion with Allianz. The details of this deal have received a great deal of attention from the African market and are expected in the coming weeks.