All data are collected in the Fiscal Year of 2008-2009.

South Africa / Finance, Insurance, Investment

Sanlam Ltd is a financial services group in South Africa, listed on the JSE in Johannesburg and the Namibian Stock Exchange. The Sanlam Group conducts its business through Sanlam Limited, the corporate head office and four business clusters (Retail, Institutional, Short-term Insurance and Corporate). The corporate head office is responsible for the Group's centralised functions such as strategic direction, financial and risk management, marketing and communications, human resources and corporate social investment (CSI).

The Short-term Insurance cluster is comprised of a 57 percent shareholding in Santam, the leading short-term insurer in South Africa, and a direct 55 percent interest in MiWay, the Group’s newly established direct financial services business.

Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappij (Santam) was registered on 28 March 1918. However, before Santam was even registered it was decided to convert the life assurance department to a separate company to ensure that long-term profits, payable to policyholders would be separated from short-term profits payable to shareholders. The Suid-Afrikaanse Nasionale Lewens Assuransie Maatskappij Beperk, Sanlam, was registered on 8 June 1918. Sanlam, the subsidiary, consequently became the spearhead of the operation, while Santam remained focused on short-term insurance.

During the nineties Sanlam's focus gradually shifted from life insurance to providing a broader range of financial products and services and in 1998 Sanlam was demutualised, listing on the JSE Securities Exchange, as well as the Namibian Stock Exchange on 30 November 1998. This changed Sanlam from a mutual entity into a public company with a share capital, namely Sanlam Life Insurance Ltd. At the same time a separate company, Sanlam Ltd, was installed as the parent company of the Sanlam group of businesses. The Group was also restructured into several independent businesses within a federal business structure.

Sanlam was the first major financial institution in South Africa to conclude an empowerment transaction in 2004. A broad-based black empowerment consortium, Ubuntu-Botho (UB), led by businessman Patrice Motsepe, bought a 10 percent shareholding in Sanlam. Since the UB transaction extends its shareholding to micro and small businesses, it gives Sanlam access to a significantly expanded base of potential customers. The Ubuntu-Botho consortium has three anchor shareholders: Sizanani-Thusanang Helpmekaar under Patrice Motsepe (55 percent); Sanlam/Ubuntu-Botho Community Development Trust (20 percent); and the Broad-based Empowerment Groupings (25 percent).

2 Strand Road, Bellville, South Africa;
Tel: (021) 947-9111

Sanlam Limited, through its subsidiaries, provides various financial solutions to individual and institutional clients primarily in South Africa and internationally. The company offers a range of life insurance and personal financial services and solutions, including estate planning and trusts, home loans, personal loans, linked products, money transfer, and financial services, as well as providing financial solutions primarily to entry-level market. It also offers services and solutions, including traditional asset management, alternative investment solutions, property asset management, collective investments, private client investment management and stock broking, multi-manager management, and investment administration. In addition, the company provides life insurance, investment, and annuity solutions for group schemes, and retirement funds and fund administration for retirement and umbrella funds. Further, it offers risk management, structured product solutions, and associated capital market activities.

8,894 employees

Since listing in 1998, the Sanlam share price has delivered an average compound return of 14,9 percent per annum, consistently outperforming its peers as measured by the South African Life Assurance Index by around 10 percent each year.

Contribution to net Group operating result: Retail: R1 757 million; Institutional: R737 million; Short-term: R439 million; Corporate: R131 million

Contribution to Group new business volumes: Retail: R36 014 million; Institutional: R51 957 million; Short-term: R12 165 million

Santam is the largest short-term insurer in South Africa with a market share exceeding 20 percent and a client list that includes the majority of the top 100 companies listed on the JSE. The Sanlam group has a 15 percent market share.

“To be the leader in client-centric wealth creation and protection-includes creating, protecting and growing wealth for our clients”

‘’Our business model is focused on client-centricity and on being solution orientated. In line with our strategy of client-centricity, we have segmented our market into four individual sub-brands to identify unique portfolios of solutions tailored for relevant and specific retail segments: Sanlam Sky for the entry-level market; Sanlam Topaz for the middle market; Sanlam Cobalt for business-owners and professionals; and Glacier by Sanlam for the affluent market.

‘’Our businesses in the investment and institutional markets traditionally all provide customised solutions specifically designed to meet the needs of their clients and they strongly reinforce the overall corporate brand positioning Sanlam’s strategy is two-pronged. Firstly, it aims to drive increased returns through a continual focus on optimising capital, cutting costs and maximising efficiencies. The second part of the strategy is growing profitably through diversification by providing the full spectrum of financial services and diversifying revenue streams into new income markets and geographies, thus spreading the risk and underpinning a resilient performance in all market conditions.

‘’Optimising shareholder value through maximising Return on Group Equity Value is the primary goal of the Group. Sanlam’s strategic focus areas of capital efficiency, earnings growth, costs and efficiencies, diversification and transformation are aimed at achieving this objective. The interaction of these strategies can be illustrated as follows:

Sanlam Limited is the ultimate holding company in the Group. By virtue of its shareholding in Sanlam Limited, Ubuntu-Botho Investments is considered to be a related party to the Group. No other Sanlam shareholders have a significant influence and thus no other shareholder is a related party.

According to the Financial Sector Charter (FSC), BEE empowerment financing is geared toward mobilising proper resources and promoting the productive and sustainable participation of black companies and black people. For Sanlam this means assessing investment opportunities that yield long-term returns in excess of those of the listed markets, where there are black investors or shareholders in the target business.

Notes: We earned 5 points out of a possible 5 for BEE transaction financing in 2006 and 2007. As the FSC council exempted all non-originating institutions from targeted investments in 2006, the points scored under targeted investment were not disclosed in the 2006 report. For targeted investment, we scored 14 points out of 17 in 2007, compared to the 8 points we would have scored in 2006 had the FSC council not exempted this aspect.

Sanlam Private Equity (SPE) represents the primary area through which its FSC-compliant Investment programme is implemented. The following are more specific examples of SPE's facilitation of BEE and transformation during 2007: SPE was the sole financier of and advised on the creation of the largest black-owned welding supplies business in South Africa; funding of Destiny Corporation (Pty) Limited, a black-owned and controlled investment holding company, through acquisition of a 19,9 percent equity interest by SPE; Majority financier of the Shanduka Group's participation in SEACOM to construct a submarine fibre-optic telecoms cable on the African East Coast; and funded and participated in the acquisition of the third-largest outdoor media company in South Africa, Outdoor Network Group, by a consortium led by Zungu Investment Company Limited (ZICO).

The Insurance Laws Amendment Bill (2008) aims to strengthen the legislative framework for a sound and well regulated insurance services industry and to provide financial market stability to industry players as well as consumers. In terms of Section 3.2.10 of the summary of the bill, the further objective is to: “further regulate the limitation on remuneration to intermediaries by clearly distinguishing between the remuneration for services as an intermediary that an independent intermediary renders which are commissionable and services which are rendered by a person (which may also be an independent intermediary) in terms of a binder agreement with the long-term or short-term insurer, which are not subject to commission limits.“

In an effort to reduce costs and maintain capital efficiency, Sanlam scaled back substantially on the development and growth of most of its credit initiatives last year. In line with this Sanlam also suspended the share buy-back programme.

Future plans include:
diversifying further into the South African middle market with the Topaz offering from Sanlam Personal Finance; growing the business in the entry-level market by another 30 percent over the next two years by offering a wider product range, including short-term insurance products; increasing its footprint in the mass affluent market by making available more relevant products and focusing on service as a differentiator; expanding into the high net worth market through Sanlam Private Investments by adding credit products and access to private banking; and providing South African investors wanting to invest offshore with a more sophisticated UK offering.

In the third quarter of 2008, Sanlam announced a joint venture with SMC, India’s fourth largest securities broking house. Sanlam Investments also acquired a majority stake in a niche Australian investment management business, Atom Funds Management, last year.

In 2008 Sanlam launched the Complete Picture Pension product, a competitive annuity solution capable of delivering satisfactory returns.