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Sanlam First-Half Profit Rises on Sales, Continued Expansion

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Sept. 6 (Bloomberg) -- Sanlam Ltd., the largest South Africa-based insurer, said first-half profit increased 15 percent after the company sold more insurance policies and expanded in the U.K. and Africa.

So-called normalized earnings excluding one-time items jumped to 2.54 billion rand ($303 million) in the six months through June from 2.20 billion rand a year earlier, the Cape Town-based insurance company said in a statement today. The median estimate of three analysts in a Bloomberg survey was for profit of 2.42 billion rand. New life-insurance business volumes climbed 11 percent, Sanlam said.

“The operating environment in the second half of the year is expected to remain challenging, with weak global economic growth and volatility in investment markets also likely to continue,” the company said. “Positive one-off items in this reporting period as well as in the second half of 2011 are likely to impact on our ability to sustain the current level of growth in operating profit for the full year.”

Sanlam, which operates in Africa, Europe, the U.K., U.S. and India, has excess capital and has been searching for acquisitions to boost growth. This year it has targeted acquisitions in Bermuda, Kenya, the U.K., South Africa and Ghana. The insurer is also using cheaper insurance products in South Africa to attract lower-income earners.

Sanlam has gained 29 percent this year, making it the third-best performer on the five-member FTSE/JSE Africa Life Assurance Index.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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