Sanlam First-Half Profit Rises 30% on Life Sales; Expects Slow Second Half
Sanlam Ltd., the largest South African-based insurer, said first-half profit grew 30 percent after sales of new life insurance policies rose.
Net income adjusted for accounting charges for the six months through June climbed to 2.03 billion rand ($280.4 million) from 1.6 billion rand a year earlier, the Cape Town- based insurer said in a statement today. New life business volumes increased 13 percent, it said.
With seven interest rate cuts since December 2008 and South Africa recovering from its first recession in 17 years, consumers are paying off debt and updating their insurance needs. By the end of this year Sanlam will have bigger competition for new customers in the South African market following the planned merger of FirstRand Ltd.’s insurer, Momentum, and Metropolitan Holdings Ltd.
A slow economic recovery in the markets in which Sanlam operates will mean that there will not be “any meaningful performance improvement in the second half of the year,” the insurer said.
Sanlam has been the worst-performing stock on the five- member FTSE/JSE Africa Life Assurance index this year, returning 6.6 percent as compared with the best performer, Metropolitan, which has gained 18 percent.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net
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