SAHAM Finances, the former insurance subsidiary of the SAHAM Group, was a well-established and leading insurer present in 26 countries in Africa as well as in Lebanon. Sanlam took over the control of SAHAM Finances in three phases between 2015 and 2018.

“SAHAM Finances brought a complementary footprint and has expanded our continental business presence and given us particularly strong property and casualty insurance businesses in a number of African countries outside South Africa. SAHAM Finances has a particularly strong management team and sound financial management. We have got to know and appreciate this business over the last five years, and it is an outstanding business in every sense.

“We are fortunate to have acquired this business from the SAHAM Group who put in place a very sound set of operations and financial processes. The SAHAM Group had built its pan-African network of insurance companies up to the highest standards of ethics and compliance. This is vital as our customers need to be able to trust us to deliver on our promises. We are working hard to expand and widen the product set to be distributed through the SPA General Insurance network across Africa. In time we will build the business as the region is set to grow economically, while making life insurance an equally strong component of the offering.”

“However, in the short-term, the biggest impact on the SPA General Insurance business has been from the volatility of investment returns. The pandemic caused a great deal of volatility in investment markets, but we are confident that over time, the markets will recover, and we regard the investment losses reported at the half-year to be temporary in nature. In the longer term, Sanlam will adopt a slightly different approach to the investment of assets within SPA General Insurance, to still focus on good long-term returns but with reduced volatility.”

Mr Hanratty was recently quoted in the press as saying that the business did not “have financial controls that Sanlam would typically have”.

“The context to that statement is the different nature of the SPA General Insurance business to our South African business and, in particular, the profile of liabilities. These have a fundamentally different term and nature to our other short-term insurance liabilities, and by their nature the supporting assets are more volatile when markets are affected by events such as the Covid-19 pandemic. But it is key to understand that these are unrealised investment losses – they will reverse in time as markets recover. The press characterised our newly acquired business as misfiring – this simply isn’t true. We have acquired an excellent business that, by its very nature, has had its short-term profits hard-hit by the market volatility on the back of the Covid-19 pandemic. This is a short-term situation and is in no way a reflection on shareholders and the current and former management teams of SAHAM Finances.”

Mr Hanratty also says it is not true that the Sanlam Group is “refocusing on South Africa”. He says: “South Africa is a vital market for us, and what I wanted to emphasise is that we still see a tremendous opportunity to grow in South Africa. The acquisition of SAHAM Finances has created a new long-term platform for growth, as has our Indian investment, but we still see tremendous opportunities for value creation in South Africa. Economic growth may well be lower in South Africa for the next few years when compared against some of the other countries we operate in, but we will focus on South Africa as well as the rest of Africa.”