Operational highlights
The performance of the cluster businesses in attracting new customers and deepening relationships with existing customers was outstanding. Management is particularly pleased with the new business volumes in the life insurance and asset management product lines. The Group’s strong platform and product offering meant that Sanlam was well-positioned to meet client needs. New business volumes were 17% higher than 2020 and 46% higher than 2019.
The value of new covered business was up by 55% on 2020 and was 23% higher than 2019. The new covered business margin of 2,65% was higher than 2020 and only slightly below 2019.
Net fund inflows of R61,4 billion were 21% higher than 2020 and 41% higher than 2019.
The net result from financial services increased by 24% on 2020 was 4% higher than 2019 excluding one-off items. It is important to note that the 2020 and 2021 financial years contain significant quarterly movements. The current level of growth is therefore not expected to be maintained for the full year. Sanlam is, however, delighted that current year profits are in line with 2019 results, since the Group was targeting to restore profitability to 2019 levels as quickly as possible.
The COVID-19 pandemic continues to impact profitability and return on Group Equity Value. Significant excess mortality claims were recorded in the South African and Emerging Markets operations. The strength of the Group’s financial position has, however, enabled the Group to mitigate much of the impact of this on earnings in South African operations.
Sanlam Life and Savings paid gross mortality claims of more than R14 billion for the first 10 months of 2021. This was 88% higher than the same period in 2020, mainly due to the impact of the third wave of COVID-19 in the third quarter of the year.
Claims above the long-term expected level were R3,42 billion net of reinsurance and annuity and disability offsets within Sanlam Life and Savings, and R536 million within Sanlam Emerging Markets. As part of a package of basis changes, the Sanlam Life and Savings cluster released discretionary reserves of R2,85 billion to mitigate the impact of excess claims.
Sanlam Emerging Markets holds more limited discretionary reserves and will only consider releases at year-end based on full-year experience.