Sanlam (SLM) Q3 2024 earnings summary

Executive summary

• Achieved double-digit growth in key earnings and new business metrics for the nine months ended 30 September 2024, with net result from financial services up 15% and net operational earnings up 17% year-over-year.

• Capitec joint venture terminated at end of October 2024, with in-force book transferred and a ZAR 1.9 billion reinsurance recapture fee received, to be recognized in full-year results.

• Acquisition of Assupol Holdings completed in October 2024 for R6.6 billion, expected to drive synergies, improve sales productivity, and enhance P&L and balance sheet efficiency.

• Namibia operations incorporated into the Pan-African joint venture effective 1 July 2024, with R2.3 billion proceeds received in October.

• Group maintained robust operational and financial performance, with strong new business margins and performance across all business lines.

Financial highlights

• Net result from financial services grew 15% year-over-year for the nine months to 30 September 2024, and 17% in constant currency.

• Life insurance earnings and new business volumes saw double-digit growth; value of new business (VNB) up 13% with a margin of 2.81%.

• General insurance net result from financial services up 46% for nine months, driven by improved underwriting and investment returns.

• Group client net cash flows more than doubled to ZAR 40 billion, supported by improved flows across all business lines.

• Discretionary capital balance at ZAR 841 million as of 30 September 2024, after acquisitions and before Namibia and Capitec proceeds.

Outlook and guidance

• Management remains optimistic for the remainder of the year, citing robust performance and strategic execution.

• VNB for the full year will be impacted by the Capitec exit and Assupol inclusion, with Assupol's VNB currently lower but expected to improve over time.

• No immediate capital synergies expected from Assupol acquisition; any benefits will materialize over a longer period.

• Expects further outflows from retirement funds due to "two-pot" legislation in South Africa.

• NRFFS for the second half of 2024 expected to be similar to the first half, excluding Capitec recapture fee.