South Africa’s largest life insurance group Sanlam saw a triple-digit jump in earnings in the first half of the year. The company says its earnings patterns are back on track following the Covid pandemic (which resulted in higher death claims), while acquisitions helped new business volume growth.

Headline earnings per share (Heps) soared 118% to 339 cents per share, compared with 156 cents in the previous comparative period, Sanlam said in its results for the interim period through June 2023 on Thursday.

Overall new business grew 19% to R191 billion.

Sanlam’s retail mass business increased sales by 10%, boosted in part by its joint venture with Capitec, South Africa’s largest lender by customer numbers, which also dominates in the mass market.

While the affluent business, where growth came in at 5%, was affected by slow sales growth of savings products and direct channel sales.

The group achieved net operational earnings of R7.5 billion, up 64%, benefitting from a recovery in investment markets both locally and internationally.

Net client cash inflows were lower than the comparative period at R11.4 billion, although they remained stable. During the period, the company saw higher outflows from savings products in life insurance as well as its investment management operations.

In 2022 and 2023, Sanlam also completed its Absa Asset Management and Alexforbes transactions, which it said contributed positively to earnings and new business volume growth over the reporting period.

“The Absa Asset Management integration has progressed well, with synergy benefits realised sooner than expected. Management will continue to implement actions focused on improving the Absa Asset Management net client cash flows,” it said.

Sanlam’s deal with Absa saw the two combine their investment management businesses creating an asset management company with assets under management, administration and advice in excess of R1 trillion.

The company’s subsidiary, Glacier by Sanlam, also acquired 100% of Alexforbes’s individual client administration business, taking responsibility for its operations. The acquisition, Sanlam said, would enhance its competitiveness.

However, new business volumes in its largest unit, life insurance, were muted, seeing growth of 4%. The value of new covered business saw a 21% increase from last year and benefitted from expense efficiency and product mix shifts to more profitable lines, Sanlam said.

While persistency trends in the mass market, where consumers have been immediately affected by the high interest rate and inflationary environment, have faced some challenges, they have remained stable in the retail affluent business.

Persistency rates reflect the proportion of policyholders who have managed to retain policies and have not lapsed or surrendered their cover.

“In the retail mass business, management actions have had a positive impact on early duration persistency, which has stabilised.”

“Longer duration persistency continues to show stress, reflecting the difficult economic climate and its impact on lower-income market segments,” it said.

In the corporate segment, persistency was impacted by lower-than-expected fees due to scheme terminations and increased affordability constraints.