34 slides from Sanlam Allianz Holdings (kenya)'s earnings presentation, Mar 12, 2020
Slide 1: Annual Results Presentation
ANNUAL RESULTS PRESENTATION 12 March 2020
Slide 2: Agenda
AGENDA 01 Strategic review Ian Kirk 02 Our operating context in 2019 Ian Kirk 03 The financial results we delivered Wikus Olivier 04 Priorities for 2020 Ian Kirk 05 Environment in 2020 Ian Kirk 2
Slide 3: Strategic Review
STRATEGIC REVIEW Building a Pan-African business Strategic execution sets us apart Creating inclusive value for all our stakeholders 3
Slide 4: Strategy at a Glance
STRATEGY AT A GLANCE KEY STRATEGIC INDICATORS Our purpose Our purpose is to build a world that supports people in living their A consistent strategy with best possible lives through financial resilience and prosperity. EXECUTED THROUGH OUR strength in execution 16% FIVE CLUSTERS through: Adjusted Re
Slide 5: Strategy at a Glance: Performance Scorecard for 2019
STRATEGY AT A GLANCE PERFORMANCE SCORECARD FOR 2019 Pressure on general insurance claims ✓ Strong recovery in 2nd half of 2019 in underwriting results at Santam and Sanlam Corporate experience in key markets, collapse of the Angolan and Zimbabwean currencies and We delivered solid social and polit
Slide 6: Strategy at a Glance
STRATEGY AT A GLANCE SOUTH AFRICA LEADING General insurance, wealth management, mass affluent and middle-income life and investments STRATEGIC OPPORTUNITIES Third-party asset management, entry-level, employee benefits and healthcare OTHER EMERGING MARKETS PAN-AFRICAN FOOTPRINT Seek top-3 position in
Slide 7: Strategy at a Glance: Growth and Dividend Flows
STRATEGY AT A GLANCE We have a dual focus on future growth and dividend flows PERFORMANCE IN 2019 Dividend per share of 334 cents (3% real growth) CONSISTENT CUMULATIVE OUTPERFORMANCE STABLE AND CONSISTENT Quality of earnings OF RoGEV TARGET DIVIDEND GROWTH remains solid: continuation of positive ex
Slide 8: Our Operating Context
OUR OPERATING CONTEXT SOUTH AFRICA OTHER AFRICAN REGIONS Competition Pedestrian economic growth and high Commodity-based economies growing at unemployment; requires structural reforms much slower pace, in particular Angola, Exchange rate Risk of sovereign credit rating downgrade Nigeria and Namibia.
Slide 9: Making a Difference in People's Lives
SANLAM MAKING A DIFFERENCE IN PEOPLE’S LIVES There’s never been a better time to partner with us R540m R190bn of wealth distributed in 2019: €160m invested in R153bn to clients managed in a joint venture communities R6,4bn to government with the Dutch Development over the past R7,8bn to shareholders
Slide 10: Financial Review
FINANCIAL REVIEW Solid overall performance Partnerships delivering value Challenging conditions impacted on RoGEV 10
Slide 11: Operating and Underwriting Environment
OPERATING AND UNDERWRITING ENVIRONMENT EXCHANGE RATES SA bond yields & short-term Average Rand exchange rates interest rates (% change) +2% 9.6% Net result from 10,5% 10% financial services 7.0% 6.1% 10,0% 4.6% 3.3% 9,5% 5% 0% -3% RoGEV 9,0% -5% INTEREST -5.2% RATES 8,5% -10% 8,0% 7,5% -15% -20% +3%
Slide 12: 2019: Key Performance Indicators
SANLAM 2019: KEY PERFORMANCE INDICATORS EARNINGS Corporate activity supported the results, as well as strong float returns at Saham and exceptional growth from SIG third-party asset manager and Indian operations +9% +14% +7% 11% growth excluding increased new business strain net result from net oper
Slide 13: Cluster Contributions
CLUSTER CONTRIBUTIONS Net result from financial services New business volumes VNB R million 2019 2018 Var 2019 2018 Var 2019 2018 Var Sanlam Personal Finance 4 265 4 033 6% 61 813 60 971 1% 1 763 1 504 17% Sanlam Emerging Markets 2 632 2 038 29% 34 809 26 224 33% 343 338 1% Sanlam Investment Group 1
Slide 14: Return on Group Equity Value
RETURN ON GROUP EQUITY VALUE Growth target of long-bond rate +400bp SALIENT FEATURES Currency volatility more RoGEV (%) Adjusted RoGEV (%) pronounced as Group diversifies Prolonged period of 16 20 weak SA equity markets 1.6 18 12 0.7 16 6.4 Pedestrian growth in SA 3.7 2.6 2.8 economy 14 2.7 8 14.1 1
Slide 15: Group Equity Value Earnings
GROUP EQUITY VALUE EARNINGS SALIENT FEATURES Group Equity value earnings (R million) Increased contribution 18 000 from VNB – 4.1% of 653 11.9% 318 life return -973 16 000 Continued positive 14 000 experience variances 5 913 -7 425 12 000 One-off R292m cost of capital benefit in 2018 10 000 -16 1 09
Slide 16: 2019: Diversification
SANLAM 2019: DIVERSIFICATION Cluster analysis of net result from financial services Geographic analysis and contribution to GEV SPF still South Africa dominates still dominates Contribution to Group net result Contribution to Net result from financial services (%) GEV (%) from financial services (%)
Slide 17: Discretionary Capital
DISCRETIONARY CAPITAL SALIENT FEATURES B-BBEE issuance strengthened capital base following Saham acquisition in 2018 R382m of capital released from Namibia and R211m from Sanlam Sky African Rainbow Life capitalisation of R152m CIMA capitalisation and Saham corporate restructuring utilised R806m Sant
Slide 18: Solvency Position
SOLVENCY POSITION SALIENT FEATURES SAM solvency cover (R million) Group remains well capitalised 140 000 Sanlam Life covered 120 000 264% 253% business solvency cover remains at upper end of 100 000 211% target range – reflective 215% of prudence in valuation 80 000 of liabilities Balance sheet 60 0
Slide 19: Cluster Performance
@ CLUSTER —— PERFORMANCE aL i =
Slide 20: Sanlam Personal Finance
SANLAM PERSONAL FINANCE CLUSTER PERFORMANCE SPF New business volumes Net flows (R million) SALIENT FEATURES (R million) +1% -7% 2019 2019 Solid new business 70 000 30 000 performance in difficult environment 60 000 +0.3% 25 000 -19% CAGR CAGR 50 000 20 000 Renewed traction 40 000 15 000 at Glacier 1
Slide 21: Sanlam Personal Finance
SANLAM PERSONAL FINANCE CLUSTER PERFORMANCE SPF Net value of new life business Net result from financial SALIENT FEATURES (R million) +17% services (R million) +6% VNB to R4 265 m 2019 2 000 4 500 Strong growth at Sanlam 1 800 +34% Sky and Recurring 1 600 +17% 4 000 +3% premium sub clusters 419 CAGR
Slide 22: Sanlam Emerging Markets
SANLAM EMERGING MARKETS CLUSTER PERFORMANCE SEM New business volumes Net fund flows SALIENT FEATURES (R million) +33% (R million) +31% 2019 2019 Strong double-digit growth 40 000 15 000 from most regions and 35 000 +23% lines of business +24% 10 000 CAGR 30 000 CAGR (5 yrs) Namibia investment flows
Slide 23: Sanlam Emerging Markets
SANLAM EMERGING MARKETS CLUSTER PERFORMANCE SEM Net value of new life business Net result from financial SALIENT FEATURES (R million) +1% services +29% 2019 (R million) 2019 VNB 400 3 500 Strong growth in Namibia, 350 +4% 3 000 +22% Botswana and Malaysia in 300 CAGR 2 500 CAGR line with new business
Slide 24: Saham Net Insurance Result
SANLAM EMERGING MARKETS CLUSTER PERFORMANCE SEM Analysis of Saham conventional net insurance result before taxation and non- controlling interest (100% view)(100% view) SALIENT FEATURES Net insurance margin 2019 % 2018 % 2019/ within target range Rm of NEP Rm of NEP 2018 Underwriting margin below 5%
Slide 25: General Insurance Ratios
SANLAM EMERGING MARKETS CLUSTER PERFORMANCE SEM General insurance ratios – 31 December 2019100% view) SALIENT FEATURES Saham and Shriram General Insurance % of NEP Santam SEM other Saham exposed to longer tail lines of business Net earned premium 100.0 100.0 100.0 (bodily injury) Net claims incurred
Slide 26: Insurance Funds Composition
SANLAM EMERGING MARKETS CLUSTER PERFORMANCE SEM Insurance funds composition at 31 December 2019 (%)100% view) SALIENT FEATURES Saham portfolio 100 54 9 44 exposed to equity 90 7 and property to 80 optimise RoGEV 70 over the long term 70 60 Higher expected volatility in float 50 41 returns 40 46 Inve
Slide 27: Investment Group: JSE Indices
SANLAM INVESTMENT GROUP CLUSTER PERFORMANCE SIG JSE indices SALIENT FEATURES SA equity markets 60 000 15 000 and GDP 58 000 unsupportive of 14 000 growth for a number 56 000 All Share of years 54 000 13 000 International and Swix 52 000 asset class 12 000 50 000 diversification 48 000 provided resil
Slide 28: Sanlam Investment Group
SANLAM INVESTMENT GROUP CLUSTER PERFORMANCE SIG Net investment business flows Net result from financial (R million) services SALIENT FEATURES +194% (R million) -7% 2019 2019 Net fund flows 25 000 1 400 Strong inflows at +12% 1 200 0.3% SA third-party asset 20 000 CAGR (5 yrs) CAGR manager across ret
Slide 29: Santam
SANTAM CLUSTER PERFORMANCE SNT Gross written premiums Net result from (R million) financial services SALIENT FEATURES +7% (R million) +2% 2019 Gross written premiums 2019 for conventional business 35 000 1 400 grew by 7% in difficult 30 000 +8% 1 200 +7% environment CAGR CAGR 25 000 1 000 7.7% under
Slide 30: Sanlam Corporate
SANLAM CORPORATE CLUSTER PERFORMANCE SC New business Value of new life Net result from volumes (R million) business (R million) financial services +14% +22% (R million) +2% SALIENT FEATURES 2019 2019 2019 New business 200 700 16 000 +32% +12% Sanlam Corporate had a 14 000 CAGR 180 20% 600 very good
Slide 31: Strategic Priorities
STRATEGIC PRIORITIES SPF SEM SIG SANLAM PERSONAL SANLAM EMERGING SANLAM INVESTMENT FINANCE MARKETS GROUP Continue to expand intermediary channels and Improve GI margin in SPA through focus on Maintain consistent superior investment grow market share in challenging conditions quality of business, cla
Slide 32: Strategic Priorities
STRATEGIC PRIORITIES SNT SC G SANTAM SANLAM CORPORATE GROUP Focus on profitable growth; Grow market positioning in Employee New and expanding strategic new 5-year plan Benefits and Healthcare across all major partnerships across Africa Pan-African strategy in partnership with offerings Capital optim
Slide 33: Environment in 2020
ENVIRONMENT IN 2020 Economic and Improved investor confidence operating environment dependent on: will remain challenging Public sector restraint in SA and Namibia Concrete plans to resolve governance and finances of SOEs Policy certainty/implementation of structural reforms to boost economy More po
Slide 34: Wealthsmiths
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