Sanlam Emerging Markets

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Transcription:

Sanlam Emerging Markets Junior Ngulube October 2017 Insurance Financial Planning Retirement Investments Wealth

agenda the SEM journey SEM strategy focus on priority markets to end 2018 SAHAM Southern Africa (Namibia/Botswana) Kenya Malaysia growth through products summary

the SEM growth journey largely building footprint 2005 African Life Shriram Life JV 2010 Aflife Shriram Life Shriram General Letshego Uganda 2012 Shriram Capital 2014 MCIS Soras Oasis MicroEnsure EIC 2016 BIC Saham Pre 2005 Sanlam Namibia 2008 Shriram General JV 2011 FBN Life Nico Life Nico Holdings Namibia Medical 2013 P&O STFC CIH Nico General Santam Namibia 2015 Nico Vida Zimnat Gateway 2017 Saham II PineBridge LAC

our geographic footprint largely complete stay ahead in Africa (bolt-on acquisitions), keep optionality in South and SE Asia

SEM s vision is to be a leading pan-african diversified financial services player and have a meaningful presence in India and Southeast Asia. We will become the number 1, 2 or 3 player in our markets or niche segments. We will pursue new opportunities to improve and extend our product and service offerings in order to become the go-to partner for corporates. Sanlam Emerging Markets Consists of the following entities Functional support teams SEM Centre In-country partners 1 Regional support teams 16 subsidiaries, 22 associate companies and 7 Saham businesses To serve the following countries 8 countries Southern Africa region 5 countries East Africa region Africa 2 countries Anglophone West Africa region 19 countries Francophone North and West Africa region 2 Asia 3 countries With the following products Life insurance Existing products General insurance Asset management Retail Credit Employee benefits incl. PFA New products Health Reinsurance Being distributed by the following partners Brokers Bancassurance Tied agents Direct Telco s To the following clients Retail Commercial Corporate Institutional Note: 1 distinction between subsidiaries and associates is based on direct ownership by Sanlam 2 Saham countries exclude overlaps and Europe

SEM s strategic pillars strategic shifts 01 drive profitable growth in existing businesses focussing on high potential markets and ensure sufficient capacity and capabilities to execute 02 increase the delivery off the SEM footprint and pursue product growth through innovation and new product lines 03 unlock value through increased shareholding, in-country consolidations, crossborder collaboration with regional partners and strategic alliances 04 entrench and build the Sanlam brand, align culture and ensure strong values and ethics 05 ensure strong governance of in-country partners

driving organic growth focusing on priority markets

SAHAM key to future growth

Saham earnings as per Saham Finance reported consolidated income statement MMAD 100% 1H 2016 2H 2016 1H 2017 gross premiums 5 496 4 862 5 951 net premiums 4 537 3 852 4 879 net result from financial services 167 207 273 life insurance 27 34 41 non-life operations 140 173 232 net investment return 72 22 86 life insurance 12 4 13 non-life operations 60 18 73 shareholder net investment returns 53 46 53 foreign exchange gains 52 16 73 net finance charges -33-40 -40 normalised headline earnings 239 228 360 Average MAD / Rand exchange rate 1.57 1.48 1.34

2016 performance in constant currencies Gross Written Premiums of MAD 10 358m in 2016 represented 14% growth on 2015 and included: 8% organic growth Strong contributions from Saham Maroc and Saham Assistance A 26% decline in the volumes from Angola Poor 2H16 from the West African region (Gabon, Cameroun) Including Continental Re for the full year Aggregate Net Profit (before minorities) of MAD 709m represented a decline on the MAD 755m achieved in 2015, and included: Negative MAD 105m Morocco tax impact, which was not for Sanlam s account Angola result deterioration Aside from Angola, an 18% organic profit growth achievement Saham Finance achieved an aggregate non-life combined ratio of 96.5%

1H2017 performance in constant currencies Gross Written Premiums of MAD 5 951m represented an 11% year on year achievement and included: Recovery from Angola No external growth GWP consist of 14 : 86 contributions for life : non-life Main lines of non-life insurance are 34% motor, 21% health and 12% fire (55% therefore from local risks and individuals) Aggregate Net Profit (before minorities) of MAD 565m represented a 31% year on year growth and included: Organic growth of 12% (strong growth in internal reinsurance profits but underperformance from West African region as well as Lebanon) Exchange rate gains at holding company level (Saham hedged the $ inflows from the Sanlam transaction) Following Sanlam s capital injection: repayment of debt Saham Finance achieved an aggregate non-life combined ratio of 96.0%

aggregate GWP before minorities

aggregate net profit before minorities Saham Maroc a significant contributor

Saham earnings reported by SEM Acquired 1 March 2016, increased stake 1 May 2017. Estimate accounting is applied. R m 10 months 2016 1H 2017 Effective share 22.5% 22.5% - 39.63% net result from financial services 88 116 life insurance 18 24 non-life operations 70 92 net investment return 26 35 life insurance 6 8 non-life operations 20 27 normalised headline earnings 114 151

progression of the GEV 2016 SEM effective share (22,5% after 2016 transaction) annualised Covered Non-covered Total RoGEV Price paid - March 2016 853 3 411 4 263 - -5% - goodwill adjustment -172 - -172-5% - acquisition premium adjustment -37-147 -184 20% - normalised return 180 512 692 0% - investment return variances - - - -20% - foreign currency translation -140-579 -719 0% - economic assumption changes - dividend paid GEV December 2016 683 3 197 3 880 reported RoGEV for the full year -23% -7% -11% SEM hurdle for the full year 18%

progression of the GEV 2017 SEM effective share (39,6% after 2017 transaction) Covered Non-covered Total GEV December 2016 543 2 618 3 161 6 month Price paid - May 2017 690 3 909 4 599 RoGEV - -1% - goodwill adjustment -43 - -43-4% - acquisition premium adjustment -40-228 -268 8% - normalised return 54 450 503-3% - investment return variances - -182-182 -2% - foreign currency translation 11-120 -108-6% - economic assumption changes -21-348 -369 - dividend paid -78-78 GEV June 2017 1 876 9 218 11 095 reported RoGEV for the 6 months -4% -9% -8% SEM hurdle for the full year 17%

Group Equity Value Risk going forward: further devaluation of the Angolan Kwanza

Saham strategic focus areas opportunities for growth and synergies opportunity to optimise reinsurance via a pan-african structure cooperation on bancassurance, bancassurance and broker partnerships cooperation on TPA and health insurance leverage footprint for multi-national offering build Saham s Life Insurance presence (Ghana/Cameroon/Senegal in phase 1 and Ivory Coast, Morocco and Angola in phase 2) explore assistance business for Southern Africa capital and investments optimisation build Saham Ghana as part of re-entry into Ghanaian market

focus on priority markets Namibia Botswana Kenya Malaysia

focus on key markets maintain leadership positions in Southern Africa Namibia sluggish economy and lack of liquidity in the market the overall savings / investment business is down due to lower levels of disposable income the retail insurance is down in the total market - affluent by 13% and ELM by 6%. losses in low-margin group risk business new system implementation remedial actions staff and broker training to extract efficiencies from the recently implemented administration system; launched new products in second half of 2017, enhanced risk covers and funeral benefits; bancassurance focus with Bank Windhoek partner; enhanced reinsurance programme for the Group Risk Schemes Botswana economic decline, mainly driven by closure of a number of mines, resulting in retrenchments. increased competition by aggressive pricing (annuities, GLA) remedial actions operational cost reductions given mature book and market leadership position (75%) new products and markets (Shariah product, revamped savings and funeral products, affluent market segment) launch of loyalty program to ensure client retention

focus on key markets regain leadership position in East Africa and fix Malaysia Kenya charted a 5-year turnaround strategy in 2015 restructuring the life and GI companies to achieve cost efficiencies and optimal productivity. growing the retail life business and regain market share to be among top 3 life insures in the market. reposition the GI business to grow into a tier 1 GI insurer (also pursue bolt-on acquisition to gain scale) maximize synergies between the subsidiaries scale the AM business (integration of PineBridge acquisition) Uganda acquisition and integration of LAC (gain scale in GI market) Malaysia POI grow topline focusing on agent productivity, new products (motor and non-motor) aggressive marketing campaign given detarrifing capital and investment management MCIS deployment of SA ex-pat management (CEO, COO, actuarial, distribution) focus on improving and growing tied-agent distribution model alternative distribution channels (digital, brokers)

growth through products

drive profitable growth in our existing and new product lines

in summary footprint largely complete sweat the current footprint extract synergies and assist Saham to grow LI businesses focus on profitable growth and maintain/regain leadership in key markets pursue bolt-on acquisitions to gain scale new revenue streams via new products leverage footprint for multi-national offering

thank you