Johannesburg - Sanlam posted a slower first-half profit growth on Thursday as high personal debt levels and increasing energy prices hit consumers’ disposable income at its mainstay South African market.
South Africa's largest insurer by value said diluted headline earnings grew 6 percent to 233.1 cents per share in the six months to the end of June, a slowdown from nearly a one-third rise the same time a year ago.
Headline EPS is the main profit measure in South Africa that strips out certain one-off items.
“Th South African economy continues to struggle with a modest growth outlook of below 2 percent for 2015,” Sanlam said in a statement.
“Disposable income remains under pressure from a combination of high exposure to debt and inflationary strain, in particular large hikes in electricity prices.”
Insurers in Africa's most advanced economy are struggling to sell insurance at a faster rate as job losses sweep across the country's mining and manufacturing industry.
In response, Sanlam has been bulking up its presence in Africa, where rapid economic growth has increased the number of people with money to spend on insurance to protect their wealth.
The company, which operates in 10 African countries including oil-rich Ghana and Africa's biggest economy Nigeria, told Reuters last week that it was in talks about an acquisition in Angola.
REUTERS