Chief executive Johan van Zyl (left) and chief financial officer Kobus Moller deliver Sanlam's results yesterday. Photo: Simphiwe Mbokazi

Reuters and Bloomberg

SANLAM, South Africa’s largest insurer by market value, posted an expected 28 percent jump in half-year earnings yesterday as its diversification into other African markets and Asia paid off.

Sanlam’s chief executive, Johan van Zyl, said: “The key is to build our footprint in Africa. In India we have seen some movement towards lifting the foreign direct investment limit of 26 percent to 49 percent.”

The insurer said diluted headline earnings a share totalled 220.2c in the six months to June, from 171.4c a year ago. It had flagged earnings would be up to 30 percent higher. New business volumes climbed 7 percent to R88.7 billion.

Sanlam said that while economic conditions in its key South African market were strained, businesses elsewhere in Africa and India achieved better growth.

Sanlam, which has a R3.3bn warchest for expansion in its Indian and African operations, was also scouring Ghana and Kenya for possible acquisitions, Van Zyl said.

The firm has already spent another R1.5bn on expansion since January.

Sanlam said: “Our identified growth markets in Africa, India and south-east Asia made a strong contribution to the group’s results for the period, notwithstanding slower economic growth also being experienced in a number of those areas.” It has operations in several African countries, India, Europe, Australia and in the US.

Van Zyl said the company planned to spend up to R550 million to raise its stake in the insurance arm of India’s Shriram Group to 49 percent by the end of the year .

Sanlam’s emerging market deals in the past 12 months have included buying a stake in a Malawian insurer, a joint share in Nigeria’s Oasis Insurance, 51 percent of Malaysia’s MCIS Zurich Insurance and a 49 percent holding in Niko Insurance Tanzania. The share price closed up 0.73 percent at R68.79.