Sanlam, Africa’s top insurer, which is partially controlled by South African billionaire Patrice Motsepe, plans to grow into India’s asset and wealth management markets. The move is part of a larger effort to seize growth prospects in one of the world’s fastest-growing major economies.
The insurer intends to strengthen its cooperation with Shriram Capital Group by forming an equal joint venture focused on wealth management and advisory services. Sanlam’s investment in 2005 has proven successful in the credit and insurance industries, and this new initiative builds on that foundation.
Sanlam CEO Paul Hanratty emphasized the potential of India’s fast rising economy, with a substantial section of the people being able to save and invest for their future. “A large number of people are breaking free from the true poverty trap, so they can begin to focus on providing for the future,” Hanratty said in an interview Thursday.
Sanlam’s India operations have significantly boosted its performance, accounting for 16% of earnings in the six months ending June 30, up from 10% in 2021. During this period, headline earnings increased by 43% due to growth in life and health insurance, a boom in general insurance, and a recovery in investment management. The company’s primary profit indicator, net result from financial services, increased 19% per share.
The International Monetary Fund expects India’s $3.9 trillion economy to grow by 6.8 percent this year, while South Africa’s economy is anticipated to increase by only 0.9 percent. India’s wealth is expected to reach $730 billion by 2028, drawing large global investors including HSBC Holdings Plc, Barclays Plc, and BlackRock Inc.
“The operating environment has been a little bit better in the first half of 2024,” Hanratty said, citing the stabilizing effect of South Africa’s May elections, which saw the African National Congress form a multiparty administration. This political upheaval has improved the outlook for Sanlam’s domestic business.
Sanlam, established in 1918, has a market capitalization of R143 billion ($7.6 billion) on the Johannesburg Stock Exchange (JSE). Patrice Motsepe, Africa’s first Black billionaire, owns 7.8 percent of Sanlam through Ubuntu-Botho Investments and serves as its deputy chairman.
Sanlam’s global expansion, including a $1.9 billion joint venture with German financial services major Allianz SE in Africa, strengthens its position in the financial sector.
Sanlam Life proposes to buy a 25% share in African Rainbow Capital’s Financial Services Holdings (FSH) for $135 million. This enhances Sanlam’s relationship with ARC, led by Motsepe, and demonstrates the company’s commitment to expansion and innovation in critical markets.
