Sanlam, a major insurance and financial services group with majority stake in FBN Insurance said in its 10 months operational update that its business was pressured low growth across its business units.
The company reported that its new business volumes of R195 billion, up 11% on the first 10 months of the 2015 financial year. However, the Sanlam is still not doing well as it should considering the fact that gross written premium growth at Santam was under pressure, specifically in the specialist insurance lines, resulting in a lower growth rate compared to June 2016.
In the business update, Sanlam noted that “The challenging operating conditions experienced in the first six months of 2016 persisted for the 10 months to 31 October 2016 as anticipated. Economic growth in most markets where the Group operates remains below longer-term potential”
As an outlook for the remaining part of the year, the company said “We expect that the economic and operating environment will remain challenging for the remainder of 2016 with a resulting impact on the Group’s key operational performance indicators. A number of factors are likely to impact on the Group’s ability to maintain the 10-month growth rate in net result from financial services for the full 2016 financial year, including average investment market levels, the strengthening in the Rand exchange rate and the high comparable 2015 base for performance fees at Sanlam Investments.
As a guidance to its investors, the group noted that “Shareholders also need to be aware of the impact of movements in the Rand exchange rate, the level of interest rates and financial market returns and volatility on the Group’s investment return and Group Equity Value. Relative movements in these elements may have a major impact on the growth in normalised headline earnings and Group Equity Value to be reported for the full 2016 financial year”.