Interim Results 2018 Investor Presentation

Transcription

1 Interim Results 2018 Investor Presentation

2

3 Investor Presentation 2018 Interim Results 6 September 2018 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

4 Strategic review Operating environment in 1H2018 Financial Review Our Pan-African opportunity Strategic priorities Outlook 2 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

5 Strategic review Recent acquisitions delivering on business plans SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

6 A strategy that supports sustainable performance A key focus is to deliver on the Pan-African opportunity Our vision To lead in client-centric wealth creation, management and protection in South Africa To be a leading Pan-African financial services group with a meaningful presence in India & Malaysia To play a niche role in wealth and investment management in specific developed markets Our strategic intent Sustainable value creation for all our stakeholders Strategic pillars Profitable top-line growth through a culture of client-centricity Extracting value through innovation and improved efficiencies Transformation Enhancing resilience and earnings growth through diversification Responsible capital allocation and management 4 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

7 Our long term strategic execution Optimising shareholder value with a meaningful cash component Target: SA 9yr risk free + 4% Target: 2% - 4% real growth Consistent outperformance of RoGEV target H18 Target Actual Balancing growth and dividend flows yr CAGR 12% Stable dividend growth Dividend Cash earnings Target is to increase cash generation from SEM operations over time; also need to deliver returns on recent investments, in particular Saham Finances SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

8 Strategic progress in 1H2018 Profitable top-line growth through a culture of clientcentricity Solid new business growth in most clusters 30% 25% 20% 13% 8% 10% 5% 0% -1% -10% -9% Sanlam Personal Finance Sanlam Emerging Markets Sanlam Investment Group Santam Sanlam Corporate Sanlam Group 6% 5% 4% 3% 2% 1% 0% Per product VNB margins maintained; change in mix; SEB pipeline 4,80% 4,28% 2,76% 2,61% 2,70% 2,46% 0,69% 1H17 Sanlam Personal Finance Sanlam Corporate 0,51% 1H18 Sanlam Emerging Markets Sanlam Group Enhancing resilience and earnings growth through diversification Acquisition of remaining stake in Saham Finances progressing balances SEM diversification to high-growth areas* Life insurance 18% General insurance 52% Credit & other 30% * Composition post acquisition of remaining Saham Finances stake Namibia/Botswana 17% Rest of Africa 56% India/Malaysia 27% Conclusion of Capitec Bank agreements Annual premium for credit life underwriting received in 1H18 Promising initial demand for funeral products 6 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

9 Our progress in 1H2018 Extracting value through innovation and improved efficiencies exceeding new business and VNB targets digital learnings opening new partnership opportunities BI & Big Data business demand exceeding expectations focus on improving underwriting accuracy, client engagements and consolidating data management Responsible capital allocation and management Discretionary capital R1.5bn capital released from operations Equity raised at favourable price to de-risk Saham Finances acquisition Protection provided by Saham Finances hedge against Rand volatility SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

10 Operating environment in 1H2018 Challenging conditions in South Africa and Namibia 8 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

11 Business environment Headwinds in South Africa and Namibia Investor confidence remains under pressure, but with some improvement Pedestrian economic growth Investment market volatility Rising interest rates Currency volatility South Africa Rest of Africa Namibian economy impacted by weak public sector investment and sluggish private sector credit extension Nigerian and Angolan currencies remained under pressure Economic outlook improving elsewhere India & Malaysia Global Strong economic growth Positive outlook No major changes in policy expected Favourable economic growth outlook Measured tightening in monetary policy Risk of trade war between US, Europe and China SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

12 Financial Review Diversification provided resilience under difficult conditions 10 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

13 Reporting environment Volatile investment and currency markets 10,0% 9,5% 9,0% SA bond yields & short-term interest rates Average Rand exchange rates United Kingdom USA Botswana Morocco India Malaysia 2,0% 3,7% Rest of Africa 8,5% 8,0% 7,5% 7,0% Dec-16 Jun-17 Dec-17 Jun-18 9 year Avg ST EV economic Net profit: -R49m assumption changes: Net VNB: -R6m -R471m ROGEV: -1.7% VNB: -2% -6,8% -0,3% -0,7% -6,8% -8,4% Santam underwriting result (Rm) Benign claims environment at Santam EV investment variances: -R629m Pressure on fee income JSE Indices Dec-16 Jun-17 Dec-17 Jun-18 All Share Swix Avg Swix 1H17 H18 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

14 Overview of 1H2018 performance HIGHLIGHTS Adjusted RoGEV of 18.2% well in excess of target Exceptional underwriting performance by Santam Strong operating profit growth at SEM and Sanlam Corporate Positive experience variances persisting LOWLIGHTS Underperformance in SEM Kenya Life, Tanzania GI, Uganda Life and Zambia Life Low growth in SPF Individual Life risk new business and lower margin mix at Glacier Lower new business volumes and net inflows at Sanlam Investment Group; decline in profitability Improved single premium inflows at Glacier and strong individual life risk business growth at Sanlam Sky Strong new business volumes in most SEM operations Conclusion of Capitec Bank credit life and distribution agreements Strong pipeline of new business at SEB and Safrican post 30 June SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

15 Key Performance Indicators Earnings per share Net operating profit per share increased by 7% (8% on comparable basis) Normalised headline earnings per share up 8% Business volumes New business volumes declined by 1% to R110bn (in line with 2017 in constant currency) Net life VNB up 1% (6% on comparable basis) Net VNB margin of 2.46%, compared to 2.61% in 2017 Net fund inflows of R17.2bn compared to R18.9bn in 2017 Group Equity Value Group Equity Value of R60.90 per share Annualised RoGEV per share of 13.7%, adjusted 18.2% - well above hurdle rate SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

16 Financial Review Sanlam Personal Finance 14 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

17 Sanlam Personal Finance R million New business volumes % Sanlam Sky % Individual life risk % Capitec credit life Other % Recurring premium & SBD % BrightRock Other % Glacier % LISP % Life investments % Net flows Sanlam Sky Recurring premium & SBD (1 261) (2 227) Glacier SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

18 Sanlam Personal Finance R million Net value of new life business % Sanlam Sky % Recurring premium & SBD % BrightRock Other % Glacier % Net new business margin 2,70% 2,76% Sanlam Sky 8,00% 7,79% Recurring premium & SBD 2,72% 2,02% Glacier 1,54% 2,07% 16 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

19 Sanlam Personal Finance R million Net operating profit % Sanlam Sky % Recurring premium sub cluster % Glacier % SBD & Other % Sanlam Personal Loans % Other (25) (3) >-100% Normalised (1) % Group Equity Value* RoGEV (6 months) 5,5% 8,5% (1) Excludes losses from new growth initiatives * Comparative information as at 31 December 2017 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

20 Sanlam Personal Finance Resilient persistency 5 Lapses, surrenders & fully paid-ups as % of in-force per half year middle income market 12 Lapses, surrenders & fully paid-ups as % of in-force per half year entry-level market 4,5 4 3,5 3 2,9 2,7 2,8 2,9 3,0 2,9 2,9 2,8 2,8 2,9 2,9 2,7 2, ,6 8,5 8,7 9,6 10,6 9,2 9,8 9,9 9,6 9,1 9,2 8,0 8,9 2, , , H1 H2 H1 H2 18 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

21 Financial Review Sanlam Emerging Markets SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

22 Sanlam Emerging Markets R million CCY New business volumes % 16% Excluding structural growth % 7% Namibia % 25% Botswana % -17% Rest of Africa (incl Saham Finances) % 49% Excluding structural growth % 21% India % 12% Malaysia % 1% Net fund flows Namibia (602) (1 486) Botswana Rest of Africa India/Malaysia SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

23 Sanlam Emerging Markets R million CCY Net value of new life business % -9% Excluding structural growth % 10% Namibia % 19% Botswana % 14% Rest of Africa (incl Saham Finances) % -67% Excluding structural growth % -53% India % 56% Malaysia % 83% Net new business margin 4,28% 4,80% Namibia 4,67% 3,47% Botswana 6,13% 5,12% Rest of Africa 1,96% 6,47% India 5,56% 4,41% Malaysia 3,91% 2,08% SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

24 Sanlam Emerging Markets R million CCY Net operating profit % 23% Excluding structural growth % 17% Namibia % -3% Botswana % -3% Rest of Africa (incl Saham Finances) % 40% Excluding structural growth % 13% India % 41% Malaysia % -65% Corporate 6 (12) >100% >100% Group equity value* RoGEV (6 months) 8,8% 6,6% * Comparative information as at 31 December SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

25 Financial Review Sanlam Investment Group SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

26 Sanlam Investment Group R million Net investment business flows Investment management SA Wealth management (302) (2 285) International (132) 763 New life business % Constant currency % Net life business (37) (334) 24 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

27 Sanlam Investment Group R million CCY Net operating profit % -7% Investment management SA % -7% Wealth management % 7% International % -16% Specialised Finance % -5% Group Equity Value* Covered business Other RoGEV (6 months) 5,3% 4,0% * Comparative information as at 31 December 2017 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

28 Sanlam Investment Group Investment performance Percentage of SIM s benchmark-managed funds exceeding hurdle Third party portfolios Sanlam capital and policyholder portfolios 100% 100% 95% 67% 76% 72% 79% 68% 76% 39% 31% 23% Jun17 Dec17 Jun18 Jun17 Dec17 Jun18 3yr 5yr 3yr 5yr 26 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

29 Financial Review Santam SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

30 Santam R million Net earned premiums % Gross operating profit % Underwriting surplus % Working capital & other % Net operating profit % Underwriting margin 8,5% 4,0% Group Equity Value* RoGEV (6 months) 9,2% 4,7% * Comparative information as at 31 December SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

31 Financial Review Sanlam Corporate SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

32 Sanlam Corporate R million New business volumes % Recurring risk % Life other % Investment Net fund flows (353) 529 Value of new life business % New business margin 0,51% 0,69% 30 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

33 Sanlam Corporate R million Net operating profit % Employee Benefits % Healthcare % Corporate (6) - - Group Equity Value* RoGEV (6 months) 6,9% 9,2% * Comparative information as at 31 December 2017 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

34 Financial Review Sanlam Group 32 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

35 Business flows Gross Net R million by business Personal Finance % Emerging Markets % Sanlam Investment Group % Santam % Sanlam Corporate % (353) 529 by licence Life insurance % General insurance % Investment % Total % SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

36 Net value of new covered business Net value of New Business Margin R million CCY* Personal Finance % 6% 2,70% 2,76% Emerging Markets % -9% 4,28% 4,80% Sanlam Corporate % -27% 0,51% 0,69% Total % 2% 2,46% 2,61% * 6% excluding structural growth and on consistent economic basis 34 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

37 Net value of new covered business Change in mix to lower margin products and underperformance in East Africa Value of new business (Rm) vs new business margins (%) H07 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% South Africa Rest of Africa Other International Margins - rhs SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

38 Net operating profit R million CCY Personal Finance % -2% Emerging Markets % 23% Sanlam Investment Group % -7% Santam % 70% Sanlam Corporate % 26% Corporate & other (18) (2) >-100% >-100% Total % 10% 36 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

39 Income statement R million Net operating profit % Per share (cents) 211,0 197,9 7% Net investment return % Other (167) (161) -4% Normalised headline earnings % Per share (cents) 236,2 218,7 8% Fund transfers Headline earnings % Per share (cents) 248,6 225,3 10% SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

40 Group Equity Value Equity Value* RoGEV R million Rm % Group operations ,0% Personal Finance ,5% Emerging Markets ,8% Investments ,3% Santam ,2% Sanlam Corporate ,9% Discretionary & Other (294) -3,2% TOTAL ,2% cps ,4% cps annualised 13,7% Adjusted cps annualised 18,2% Return target 13,0% * Comparative information as at 31 December SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

41 Group Equity Value earnings SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

42 Experience variances One-off cost of capital impact in 1H18 from capital release R million H18 % of VIF 1H 2H 6,0% 5,5% 5,0% 4,5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% -0,5% -1,0% % of VIF R million H17 1H Risk experience Persistency Working capital Credit spreads Cost of Capital Other 40 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

43 Return on Group Equity Value Out perform growth target of long-bond rate +400bp Actual RoGEV Adjusted RoGEV ,7 1,6 0,7 1, ,8 2,7 3,7 2,6 5,2 4,0 5 12,2 12,1 14,1 13,2 13,0 12, ,2 12,1 14,1 13,2 13,0 12,9 0-2, H18 Avg H18 Avg Target Out performance Target Out performance SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

44 Geographic diversification Rest of Africa 13% Net VNB India 5% Malaysia 1% Net operating profit Other international 4% India 8% 1H18 R791m South Africa 81% Rest of Africa 15% 1H18 R4.4bn South Africa 73% Group Equity Value Malaysia 1% Other international 6% India 8% Rest of Africa 15% 1H18 R128.7bn South Africa 70% 42 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

45 Line of business diversification Group Equity Value Net operating profit Credit & structuring 9% Admin, health & other 13% Credit & structuring 10% Investment management 9% Admin, health & other 2% Investment management 13% 1H18 R128.7bn Life business 42% General insurance 20% 2018 R4.4bn Life business 59% General insurance 23% SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

46 Our Pan-African opportunity A medium to long term growth engine 44 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

47 Pan-African GDP growth Driving accelerated organic growth over the medium to long term % yr Source: World Bank SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

48 Pan-African insurance penetration Leveraged organic growth over the medium to long term 14,0% Insurance penetration as % of GDP 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% World Africa SA Namibia Botswana India Morocco Ivory Coast Kenya Ghana Nigeria Life Non-Life 46 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

49 Key drivers of insurance penetration Africa s demographic dividend population growth and urbanisation Underlying economic growth (GDP) Low insurance penetration presents opportunity for growth nascent markets Rising consumer demand (emerging middle class and increasing disposable income) New technology Mobile/online usage growth enables distribution, fulfilment and claims Opportunities for cross industry collaboration General insurance penetration increases first, followed by life insurance, employee benefits, asset management and healthcare Regulatory change, e.g. compulsory retirement savings and general insurance coverage SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

50 Saham Finances acquisition A key component in our Pan-African strategy SEM Santam Opportunities Strong life footprint and expertise GI presence characterised by start-up businesses Saham Finances Strong GI expertise in SA Specialist and reinsurance skills Complementary footprint provides us with an unparalleled presence with minimal overlap Strong GI footprint and expertise Assistance and Health business - complementarity to Saham Finances GI expertise Life presence characterised by start-up businesses Drive organic growth in current SEM GI portfolio in conjunction with Saham Finances Grow Saham Finances LI portfolio New products, e.g. assistance and medical, in current SEM market Drive growth in specialist classes in conjunction with Santam Santam plays a meaningful role in 3rd party reinsurance growth across the continent Footprint enables multinational offering including P&C and Employee Benefits (GLA & Health) Saham Finances has African health expertise Internal reinsurance optimisation through SAHAM Re 48 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

51 An unmatched Pan-African footprint Unique offering to multinationals wrapped around local presence USA Potential future expansion Sanlam and Saham Finances presence Saham Finances presence Emerging Markets - Indirect presence Emerging Markets - Direct presence Developed Markets Luxembourg United Kingdom Ireland France Switzerland Tunisia Algeria Morocco Niger Mali Senegal The Gambia Guinea Burkina Faso Ivory Coast Ghana Togo Benin Nigeria Cameroon Gabon Republic of the Congo Angola Namibia Botswana South Africa Lebanon Saudi Arabia Egypt Ethiopia Kenya India Uganda Rwanda Burundi Malaysia Tanzania Malawi Zambia Mauritius Madagascar Mozambique Zimbabwe Swaziland Lesotho Philippines Australia SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

52 Return on Saham Finances acquisition Meeting return hurdles on a comparable basis ZAR'm 2016 Annualised RoGEV 2017 Annualised RoGEV 2018 Annualised RoGEV Opening GEV Purchase price Goodwill adjustment - life % -43-1% - Acquisition premium adjustment % % - Normalised return % % % Investment return variances - 0% % - 0% Foreign currency translation % % % Economic assumption changes - 0% % % Dividends retained % Dividend paid Closing GEV Reported RoGEV -11% -3% 31% Normalised RoGEV 20% 15% 16% SEM hurdle 18% 17% 17% Compares to a 16% hurdle for Saham Finances Return from currency movements across the portfolio, especially Moroccan Dirham and Angolan Kwanza Impact from increased US risk free rate and reduced long term GDP estimates 50 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

53 Managing an expanded GI business Santam participation post the acquisition of the remaining stake in Saham Finances Santam to increase its effective stake in Saham Finances from 7% to 10% Align Santam s economic participation in the other SEM general insurance businesses in Africa, excluding Namibia, over time from 35% to also 10% Santam to take the lead in managing the combined Saham Finances and Santam specialist business on the continent in conjunction with SEM and Saham Finances Santam will play a more meaningful role in the reinsurance businesses of Saham Finances Additional support to India and Malaysia from Santam and SPF Strengthening and elevating role of Chief Risk Officer SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

54 Strategic Priorities 52 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

55 Striving for leadership in South Africa South Africa Rest of Africa General insurance Middle-income market life Number 1, 2 or 3 position in market share Retain our leadership position Mass affluent investments Wealth management India/Malaysia Index-tracking investments Diversifiers Close the gap Entry-level life 3 rd party asset management Developed markets Employee Benefits Health Niche offering for EM clients SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

56 Leadership in transformation Industry-leading direct black shareholding; strengthen UBI partnership Institutional clients increasingly focus on direct black shareholding in addition to Financial Sector Charter (FSC) score Planned 5% BBBEE share issuance will increase Sanlam s direct black shareholding to industry-leading 19% Also considering direct BBBEE shareholding in selective Sanlam businesses, e.g. Employee Benefits, third party Asset Management, Health and Distribution Will position Sanlam well to gain institutional business We recognize that these are follow-on empowerment transactions Focus will be on broad-based empowerment in conjunction with Ubuntu-Botho Investments Intent to limit dilution to a minimum Will be subject to shareholder approval 54 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

57 Sanlam Personal Finance Digital transformation of the whole value chain Close the gap in entry-level life Implement and manage impact of RDR on intermediary remuneration and business models Launch Glacier DFM in partnership with Sanlam Investment Group Manage business enablers Omni-channel and expanded distribution footprint Cost leadership through value optimisation Balance operating profit growth with new transformation initiatives SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

58 Sanlam Emerging Markets Grow SEM General Insurance portfolio in conjunction with Saham Finances Grow Saham Finances Life Insurance portfolio Drive growth in specialist classes and re-insurance in conjunction with Santam Internal reinsurance optimisation through SAHAM Re, capturing additional profit streams Saham Finances synergies are a priority, with a focus on growth synergies Become the go-to partner for multinational companies in Africa Pan-African footprint enables multinational offering including General Insurance and Employee Benefits Driving organic growth with existing partners, banks, telco s and multinational brokers and insurers 56 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

59 Sanlam Investment Group Diversify into higher margin Alternative asset classes Enhance capability to attract 3rd party inflows Transformation as a key driver to attract inflows from institutional clients Continued focus on transformation and people development Continue to optimise Sanlam balance sheet through Sanlam Specialised Finance Align full value chain through cooperation with Glacier Strengthening the turn-around of Sanlam UK, positioning the business for growth and enhancing wealth and asset management offerings for our African client base SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

60 Santam Retain market leadership in South Africa Strategic focus on Saham Finances opportunity Deliver on the opportunity for growth in international markets - specialist and reinsurance Focus on staff retention and transformation Balancing growth and profit in the intermediated South African business, Commercial & Property and specialist segments 4th industrial revolution Leverage on partnerships Use of technology in operations (artificial intelligence used in underwriting decision making and fraud detection) 58 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

61 Sanlam Corporate Drive growth in Employee Benefits and Health to achieve a fairer market share Provide a coordinated One Sanlam solution to targeted corporates by addressing Employee and Employer Income Statement and Balance Sheet levers Implement strategy, bed down operations and leadership Drive collaboration opportunities (Employee Benefits + Health + other) to increase clients employee value propositions Profitable growth: balance cross-cluster pricing to win and retain business with need to maintain adequate margins Partner with SEM to provide in-country support for clients with an African footprint SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

62 Outlook 60 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

63 Outlook for remainder of 2018 Economic environment not likely to improve over the short term in South Africa and Namibia will continue to hamper growth in most lines of business Investment market and currency volatility to persist in environment of heightened global geopolitical risk Large new business mandates concluded at SEB and Sanlam Sky subsequent to half-year Continue to execute on the strategy; conclude Saham Finances acquisition Strong focus on extracting synergies and generating target return from Saham Finances acquisition Obtain shareholder approval for BBBEE share issuance and broader BBBEE strategy SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

64 Longer term trends Emerging risks and opportunities 4 th industrial revolution Changing the way we engage with our clients Opportunities for increased efficiency, but in a responsible manner Governance and ethical leadership paramount for gaining and maintaining trust Increased levels of regulation placing pressure on compliance costs, but also increases barriers to entry Pressure on fees, especially in investment space, will continue to rise Consumer and shareholder activism Volatility the new norm, driven by rapid changes in political and social environment 62 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

65 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

66 64 SANLAM INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018