Sanlam Emerging Market in 2020
- a turnover of 46.898 billion ZAR (3.200 billion USD), that is 15% of Sanlam group [4]'s total income,
a net income of 2 377 million ZAR (162 million USD), representing 28% of the group's profits,- a workforce of 5 036 employees,
- a presence in 32 countries, excluding South Africa,
- a network of more than 23 insurance companies,
- a ROE of 6.9%.
Sanlam Emerging Market accounts for 15% of Sanlam's total revenues and 28% of its net income.
With a sustained growth, the SEM division reported 46.898 billion ZAR (3.200 billion USD) in revenues in 2020, that is almost double the 2016 premium income (23 696 million ZAR, 1733 million USD). The 2020 revenue growth is 34%.
After a 69% increase between 2016 and 2019, the net income of 2.377 million ZAR (162 million USD) in 2020 is down 10% year-on-year. Excluding Covid-19, SEM's earnings would have grown by 19% in 2020.
The decline in 2020 earnings is accounted for by :
- the deterioration of investment fund returns in North and West Africa,
- higher credit provisions in India,
- declining performance in Africa due to Covid-19,
- losses sustained by Saham Re following the explosion in the port of Beirut (Lebanon),
- the continued depreciation of local currencies against the dollar.
Sanlam Emerging Markets’ indicators
Figures in billions| 2016 | 2017 | 2018 | 2019 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | |
| Turnover (SEM) | 23.696 | 1.733 | 21.903 | 1.769 | 26.224 | 1.815 | 34.809 | 2.476 | 46 898 | 3.2 |
| Gross non-life written premiums | 2.967 | 0.217 | 15.975 | 1.29 | 11.973 | 0.829 | 21.283 | 1.514 | 23.192 | 1.582 |
| Non-life earned premiums | 2.247 | 0.164 | 12.723 | 1.028 | 9.85 | 0.682 | 15.599 | 1.109 | 16.43 | 1.121 |
| Shareholder’s equity | 18.385 | 1.344 | 23.672 | 1.912 | 40.612 | 2.812 | 38.535 | 2.741 | 34.407 | 2.348 |
| Net result | 1.557 | 0.114 | 1.793 | 0.145 | 2.038 | 0.141 | 2.632 | 0.187 | 2.377 | 0.162 |
| Loss ratio | 66.50% | 67.10% | 64.40% | 61.60% | 60.30% | |||||
Sanlam Emerging Markets: turnover per type of activity
Over the past five years, the SEM division's total life and non-life premiums have increased by 179%. This activity, which represented only 39% of the division's revenues in 2016, increased to 55% by the end of 2020.
Non-life insurance alone accounted for 35% of Sanlam Emerging Market's business in 2020, a business capped at 17% five years earlier. The premiums of this segment have increased four times during the period in question, rising from 4.013 billion ZAR (293 million USD) in 2016 to 16.479 billion ZAR (1.124 billion USD) in 2020.
Between 2016 and 2020, life insurance underwritings increased by 77%, from 5.208 billion ZAR (381 million USD) in 2016 to 9.241 billion ZAR (631 million USD) at the end of 2020.
Excluding life and non-life insurance, the share of Sanlam Emerging Market's other activities, that is, investment, credit and restructuring products, is clearly decreasing, going from 61% of the division's total revenues in 2016 to 45% in 2020.
Figures in billions| 2016 | 2017 | 2018 | 2019 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | |
| Non-life activities | 4,013 | 0,293 | 6,122 | 0,494 | 9,873 | 0,683 | 15,604 | 1,11 | 16,479 | 1,124 |
| In % | 17% | 27% | 38% | 45% | 35% | |||||
| Life activities | 5,208 | 0,381 | 5,468 | 0,442 | 6,41 | 0,444 | 8,343 | 0,593 | 9,241 | 0,631 |
| In % | 22% | 25% | 24% | 24% | 20% | |||||
| Other activities (1) | 14,475 | 1 059 | 10,313 | 0,833 | 9,941 | 0,688 | 10,862 | 0,773 | 21,178 | 1,445 |
| In % | 61% | 48% | 38% | 31% | 45% | |||||
| Total | 23,696 | 1,733 | 21,903 | 1,769 | 26,224 | 1,815 | 34,809 | 2,476 | 46,898 | 3,2 |
(1) Other activities include investment, credit, restructuring and corporate solutions, ...
Sanlam Emerging Markets: Turnover per geographical area
Figures in billions| 2016 | 2017 | 2018 | 2019 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | ZAR | USD | |
| Southern Africa | 16,365 | 1,197 | 12,73 | 1,028 | 13,992 | 0,969 | 15,695 | 1,116 | 20,84 | 1,422 |
| In % | 69,06% | 58,12% | 53,36% | 45,08% | 44,44% | |||||
| North and West Africa | 1,856 | 0,136 | 3,385 | 0,274 | 6,979 | 0,483 | 12,666 | 0,901 | 14,22 | 0,97 |
| In% | 7,83% | 15,46% | 26,61% | 36,39% | 30,32% | |||||
| East Africa | 3,364 | 0,246 | 2,975 | 0,24 | 1,868 | 0,129 | 2,362 | 0,168 | 7,728 | 0,527 |
| In % | 14,20% | 13,58% | 7,12% | 6,79% | 16,48% | |||||
| Other countries (1) | 2,111 | 0,154 | 2,813 | 0,227 | 3,385 | 0,234 | 4,086 | 0,291 | 4,11 | 0,281 |
| In % | 8,91% | 12,84% | 12,91% | 11,74% | 8,76% | |||||
| Turnover (SEM) | 23,696 | 1,733 | 21,903 | 1,769 | 26,224 | 1,815 | 34,809 | 2,476 | 46,898 | 3,2 |
(2) India, Malaysia and Lebanon
In 2020, Sanlam Pan Africa (SPA), SEM's African entity, concentrated almost all of the division's revenues, that is 91.24%. The rest of the premiums are split between the emerging markets India, Malaysia and Lebanon.
Due to the strong growth in premium income in North and West Africa following the acquisition of Saham Finances, underwriting in Southern Africa accounted for just 35% of SPA's revenues in 2020. Over the past five years, premium collection in North and West Africa has grown steadily, increasing from 7.83% in 2016 to 30.32% in 2020.
SPA's activities outside the African continent namely in India, Malaysia and Lebanon, remain stable at 9% of the portfolio.
Exchange rate as at 31/12/2020: 1 ZAR = 0.06823 USD ; 31/12/2019: 1 ZAR = 0.07112 USD ; at 31/12/2018: 1 ZAR = 0.06923 USD ; at 31/12/2017: 1 ZAR = 0.08076 USD ; at 31/12/2016: 1 ZAR = 0.07313 USD
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