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Johannesburg - Insurance group Sanlam [JSE:SLM] achieved overall
satisfactory results for the first four months of 2011, with new life insurance
business volumes increasing by 12% at sustained margins.
The group said in an update that overall net business
inflows amounted to R8.6bn - a 27% improvement on the R6.8bn achieved in the
first four months of 2010, supported by a continuing positive trend in net life
cash inflows.
The underlying net result from financial services increased
by 15%, while total new business volumes were 11% up on the first four months
of the 2010 financial year, reflecting the combined effect of a satisfactory
increase in new investment as well as new life insurance business flows.
The results were achieved amid ongoing challenging financial
and economic conditions, it said.
"The group's 2010 annual report indicated that we did
not expect the South African economy to stage a large-scale recovery in 2011,
but rather to experience slow, yet steady progress. This has been the theme for
the first four months of 2011," it said.
Relatively high salary increases and low interest rates
enabled consumers to reduce some of their debt, although consumer debt levels
remain high and together with sharp cost of living increases affect
discretionary expenditure.
This is reflected in new retail business volumes for the
period, although some improvement has been experienced in discretionary savings
in the mass middle market. Low interest rates also continue to negatively
affect demand for guaranteed and money market solutions, and have a marked impact
on interest earned on group companies' working capital, it said.
The results of Sanlam's international businesses were
negatively affected by the strong rand.
Sanlam said it remained well capitalised with identified
discretionary capital of about R4bn as at the end of December 2010.
The group said a number of strategic ventures are currently
being pursued, including discussions with its Indian partners on a possible
additional investment in the financial services businesses of the Shriram
Group.
