Sanlam (SLM) investor relations material

Executive summary

• Achieved strong strategic and operational progress, including closing the Ninety One transaction, increasing stakes in Indian insurance businesses above 50%, and advancing banking launch in South Africa.

• Maintained a robust capital position, with discretionary capital at the upper end of the target range after Indian transactions.

• Significant investments in organic growth, technology modernization, and cloud migration, with AI integration underway.

• First quarter earnings impacted by weather-related claims and investment variances, but underlying business fundamentals and client activity remain solid.

• Confident in meeting long-term growth targets despite short-term earnings pressure from market volatility and catastrophe claims.

Financial highlights

• New business volumes up 29% year-over-year to R38.6 billion; net client cash flows up 45% to R38.6 billion.

• Operating profit excluding investment variances declined by 7% in Q1 2026, but increased by 8% on a comparable basis.

• Adjusted headline earnings and investment returns were lower due to higher bond yields, weak equity markets, and weather-related claims.

• Discretionary capital decreased from R8.1 billion to R3.2 billion due to acquisitions in India.

• Indian rupee hedge loss amounted to ZAR 103 million in Q1.

Outlook and guidance

• Full-year 2026 earnings guidance is South African CPI plus 3%, excluding investment variances; through-the-cycle guidance remains at CPI plus 6%.

• Second half earnings expected to be higher than first half, subject to weather and market conditions.

• Resilient cash generation and long-term organic growth expected, supported by diversified earnings streams and strong capitalisation.

• Persistency remains strong but could face pressure if inflation rises further; margin recovery expected as product mix evolves and India improves.

• Underwriting margins for SanlamAllianz and Santam expected to be within or above target range for the balance of the year.