The Sanlam group's operating earnings rose 14% year on year to ZAR8.1bn ($496m) at end-1H2025, following a strong result in 2024, notes Fitch Ratings. This was driven by general insurance (up 42%), with continued strength in life and health (up 15%) and credit and structuring (up 18%). Investment management saw a smaller increase of 8%.
In 2024, operating earnings also rose 14% to ZAR14.1bn (ZAR15.4 bn including the one-off reinsurance recapture fee), supported by solid results across life, general insurance and investment management (end-2023: ZAR12.4bn). Operating earnings in South Africa grew by 16%, while in pan Africa it rose by 26%.
Santam profitability improved
Santam's underwriting margin rose to 11.3% at end-2025 (end-2024: 7.6%), above its 5%-10% target, reflecting improvement across all business lines. The benefits of underwriting actions implemented over the past two years were evident in 2024 and continued into 2025, supported by favourable attritional loss experience and smaller weather-related losses (by about ZAR600m versus 2024).
Ratings affirmed
Fitch has affirmed Sanlam Life Insurance's (Sanlam Life), and Santam's (Santam) National Insurer Financial Strength (IFS) Ratings at 'AAA(zaf)'. Fitch has also affirmed Sanlam—Sanlam Life's parent and the ultimate holding company of the Sanlam group—National Long-Term Rating at 'AA+(zaf)'. The outlooks are ‘Stable’.
The affirmation reflects Sanlam's strong company profile, very strong capitalisation and leverage, and strong earnings. These strengths are partly offset by the group's high exposure to risky assets.
Aside from profitability, other key drivers of the ratings include:
Strong Company Profile: Fitch views Sanlam as the leading pan-African financial services provider. Its main life insurance operating subsidiary, Sanlam Life, is one of the largest life insurance groups in South Africa (IDR: ‘BB-/Stable’), while Santam, the group's majority-owned non-life subsidiary, is the country's largest general insurer.
Sanlam targets high-potential emerging markets in Africa and, to a lesser extent, in Asia, delivering local solutions through strategic regional partnerships. In pan-Africa, Sanlam Allianz, a joint venture (JV) with Allianz SE (IFS Rating: ‘AA/Stable’), was established in 2023 and operates in 27 African markets outside South Africa, where it holds leading market positions. In Asia, Sanlam has increased its stake in long-term partner Shriram, providing access to India's expansive financial market.
High Exposure to Risky Assets: Fitch views Sanlam's investment strategy as conservative when evaluated on a domestic basis. However, Sanlam has a high level of risky assets/shareholders' equity compared with international insurers. This is due mainly to its exposure to interest-bearing investments linked to South Africa, equity investments and a high level of investments in associates following its JV with Allianz.
Very Strong Capitalisation and Leverage: Fitch views Sanlam's capitalisation as very strong; Fitch estimates Sanlam's Prism Global score was at least 'Very Strong' at end-2025, versus 'Extremely Strong' at end-2024. Sanlam's statutory solvency assessment and management (SAM) cover ratio was broadly stable at 170% at end-1H2025 (end-2024: 168%). Sanlam's Fitch-calculated financial leverage was 12% at end-2024 (end-2023: 7%), which Fitch view sas strong and supportive of its assessment of capitalisation and leverage.