The global outlook is extremely worrying, with the bond and equity markets reacting to recent events, said Mr Paul Hanratty, the Group CEO & Executive Director of Africa's largest insurer, Sanlam, which is headquartered in Capetown.
At a briefing last week on the group’s 2025 financial performance, he said, “As we look ahead, we see the following significant downside risks, continuing geopolitical tensions, especially in the Middle East, higher oil prices, inflation and interest rates, bubbles in the AI investment cycle in private credit markets and stretched government fiscal positions and weak balance sheets.”
He indicated that the conflict in the Middle East could have a massive impact on the group’s financial performance. Earnings could be hit directly as fees would be slashed when assets under management were to fall.
He said, “Equity market levels are, of course, a key driver of the fees we earn on the assets under management, while currency movements continue to influence reported results and remain largely outside of our control.”
He added, “However, we are optimistic. Our markets may be affected by these factors, but we've got plenty of resilience and upside in our balance sheet.”
2025 financial performance
Sanlam announced strong operational results for the 2025 financial year, reflecting strong growth in new business and earnings across its diversified businesses against the backdrop of geopolitical and market turbulence. The group achieved a record ZAR496bn in new business, up 22% from 2024 on an equivalent basis, driven by strong inflows into the South African asset management business and solid contributions across life and general insurance. Net client cash flows more than doubled to ZAR127bn, supported by robust life insurance inflows, living annuity sales and improved client retention.
The group achieved net result from financial services (NRFFS) of ZAR15.9bn, representing a 20% increase over 2024 on a like for like basis. This performance was supported by strong contributions from life and health, general insurance, investment management and credit and structuring activities. NRFFS benefited from favourable mortality experience and stronger asset-based fee income in the South African and Pan-African life businesses. Underwriting experience was positive across the group’s South African and Indian general insurance operations, supported by positive underwriting experience and partly offset by higher claims in the Pan-African general insurance operations.
2026
Mr Hanratty said, “After several years of inorganic activity and strong profit growth in 2025, we're investing very heavily in our growth vectors in 2026. In South Africa, the investment into our new rewards programme and banking and credit will continue through to 2027. The establishment of the Lloyd's syndicate is another area of investment for the group.”
The group will also drive growth in India through the Shriram ecosystem and to operationalise its Santam syndicate at Lloyd's.
He also said, “We're investing in modernising legacy IT platforms to improve client service and migrating systems to the cloud, which is expected to deliver longer-term cost benefits.”