Sanlam, the largest insurer in Africa, has announced that its headline earnings for the 2019 financial year plunged by 18% to ZAR7.48bn ($465m), reported Reuters.
The insurer's earnings were hurt by non-recurring expenses, including the ZAR1.7bn spent on the broad-based black economic empowerment deal that the company finalised in March 2019.
New business volumes rose 12% to ZAR249.32bn for the group during the period, but the insurer said South Africa’s economic environment was particularly disappointing, with the period seeing a lack of progress in implementing structural reforms.
Sanlam said that as the going gets tough in South Africa, the only way insurers can grow is to take market share from one another because the market is not growing.
Sanlam pointed out however that its diversification into new regions was paying off, with North and West Africa the standout performer for the year, growing new business volumes by 81%. The group’s push into the rest of Africa was given a boost in 2018 when it bought Moroccan insurance firm Saham Finances.
The company said, “We recognised from the outset that we will face a number of headwinds in 2019. Low economic growth in some of our key markets, heightened global geopolitical risks as well as volatility in investment and currency markets did not bode well for growth in our key performance indicators.”