Sanlam, South Africa’s largest insurer, closed 2025 with record new business volumes of nearly R500bn — an 18% increase on the prior year and 22% higher on a normalised basis — but headline earnings fell 18% to R16.55bn as the cumulative effect of structural changes, a strengthening rand and negative investment variances weighed heavily on the reported numbers. Headline earnings per share came in at 792 cents, down from 964 cents in 2024, while the net result from financial services — the group’s preferred measure of underlying operating performance — rose 3% to R15.9bn, or 20% higher on a normalised basis.
The gap between the record operational volumes and the declining headline number is explained almost entirely by base effects and deliberate corporate activity rather than any deterioration in the underlying business. The 2024 results benefited from significant once-off profits generated through the disposal of Sanlam’s stake in Shriram Finance, the cessation of its Capitec funeral insurance joint venture and the sale of its Namibian operations into the SanlamAllianz joint venture. None of those gains recurred in 2025, and the group also reduced its interest in SanlamAllianz from 59.59% to 51% during the year, further compressing the comparable base. Strip those effects out and the operational picture is one of broad-based growth across life insurance, health, general insurance, investments and credit and structuring.
The group had flagged the earnings decline in advance, warning in a trading statement that headline earnings per share would fall between 15% and 25% from the prior year’s elevated base. The final outcome of -18% landed within that guided range. The net result from financial services benefited from favourable mortality experience in the South African and Pan-African life businesses, stronger asset-based fee income driven by higher investment markets, and positive underwriting experience in the domestic general insurance book, where attritional and weather-related claims were lower than in 2024.
Currency movements added further complexity to the results. The rand strengthened significantly against the Indian rupee and the US dollar in the latter part of 2025, reducing the translated value of offshore earnings and shareholder fund investment returns. India, where Sanlam has been building a distribution presence and where it retains an indirect interest in Shriram Finance, delivered satisfactory earnings in local currency terms but was partially offset in translation. The Pan-Africa general insurance operations were also affected by a sharp deterioration in claims experience in the final weeks of the year.
Life insurance net value of new business declined 11% on a normalised basis, driven by a continued client preference for market-linked and living annuities over traditional life annuities — a structural shift that reduces the embedded value captured at point of sale — as well as development costs associated with building new distribution channels in India. On an actual basis, the decline was 21%, reflecting the Capitec and Namibia impacts.
Sanlam’s share price had already absorbed much of the earnings disappointment ahead of the results, having declined in the weeks following the group’s trading statement. The final dividend of 485 cents was declared, a 9% increase on the prior year’s final dividend, signalling that management views the cash generation position as sound despite the headline earnings softness.
Looking ahead, the group has adopted IFRS 17 as its new financial reporting framework from the 2026 financial year, replacing the net result from financial services measure with operating profit and net operational earnings with adjusted headline earnings — a transition that will require investors to rebuild their modelling frameworks. The Vision 2030 strategy, outlined at the group’s capital markets day late last year, targets faster growth and stronger cash generation built on the restructured South African retail mass market franchise, the deepened Allianz partnership across Africa and a reshaping of asset management towards higher-growth asset classes.