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Offbeat 27 November 2015

Offbeat 27 November 2015

I’ve been putting off this bit of writing for a couple of years. A confluence of events made it pressing now, so here it is. If you want ‘happy’, read something else.
The first thing that prompts me to write this is opening Peter Hoeg’s wonderful novel Borderliners again. It’s the story of kids used as an experiment by an elite school. The memories came flooding back.
I was part of a school experiment as well. In the Eighties, a bunch of us were assembled in what was Namibia’s first ‘mixed’ public school. The notional threat of ‘black, coloured and white’ didn’t have an impact on me. I came from a series of schools where certain behaviour was expected by virtue of insider status: religion, the culture of a group and money.
Coming from a small, non-nuclear family with no connection to the local cultures, by virtue of my mother’s emigrant status, no formal religious belonging as my mother was divorced, and no money to absolve the family, I was an outsider, not beloved of insiders.
The prospect of the new school, and being an outsider once again, held no particular fear for me. I believed I had experienced everything. The school however turned out great. By virtue of their requirement for smart kids, backed by an IQ test, many of the kids could not easily behave without asking questions, and most of them were outsiders very similar to me.
The teachers were unprepared. Although they could offer ‘normal’ school, school in the mornings, not the afternoons, and decent buildings, not trees or sheds as some of the kids had experienced, they struggled to keep pace, given their reliance on the elements of insider culture: specific types of uniform behaviour and a certain religious mindset.
They weren’t prepared for the fact that the outsiders among us made use of their new found freedom. As I remember it, the first winnowing took place a few months into the first year of school, after a weapons search. The numbers were thinned with the first bunch of expulsions. Smart sometimes means finding ways around the strictures of society, and in some instances the teachers obviously could not guide some of the kids on the far edge of outside back into the fold.
The expulsions became a regular feature: bad behaviour or not making the academic standard. One day a kid was there, one day not. There was a climate of threat and fear, but it was easy to become numbed to it. Being an outsider, it was easy enough to become cynical and uncaring, plus I had a sense of belonging to the other outsiders.
The second thing that brought about this piece of writing was an investigation into the fate of one of the people who disappeared. He was as sharp as a rusty razor. A cut from a clean, bright rasor can be solved with a plaster. A rusty razor leaves some kind of mark. He was bright , he was perceptive and he had different ways of seeing things. Talking to him left a mark.
I talked to him again in the early 90s. He was a painter. He lived on the rough side of life. He had been stabbed in the neck and could hardly speak. He was guarded as well. What I found out this week was that the reason for his disappearance was that he was jailed for rape. He died in the mid-90s.
There was some talk that it was consensual, and the parents of the girl pressured her to call it rape. Perhaps that is an attempt at absolution. Who knows. Let’s say wrong is wrong, and take it from the point that it was a crime. That still leaves the question of who was there to bring him back into the fold? Not the school.
Leaders, teachers and some of Namibia’s most noticeable achievers emerged from that school. Unfortunately some people slipped through cracks, were discarded, and the school produced scars.
I am not sure what the purpose of this column is, other than to shine a light into the darkness, and begin to get it off my chest. Thanks for hearing me out, for reading this far.
If there is anything to say it is probably that outsiders have value as well, and sometimes they need understanding and care. They shouldn’t be discarded.

About The Author

Sanlam 2018 Annual Results

7 March 2019


Sanlam’s 2018 annual results provides testimony to its resilience amid challenging operating conditions and negative investment markets

Sanlam today announced its operational results for the 12 months ended 31 December 2018. The Group made significant progress in strategic execution during 2018. This included the acquisition of the remaining 53% stake in SAHAM Finances, the largest transaction concluded in the Group’s 100-year history, and the approval by Sanlam shareholders of a package of Broad-based Black Economic Empowerment (B-BBEE) transactions that will position the Group well for accelerated growth in its South African home market.

Operational results for 2018 included 14% growth in the value of new life insurance business (VNB) on a consistent economic basis and more than R2 billion in positive experience variances, testimony to Sanlam’s resilience in difficult times.

The Group relies on its federal operating model and diversified profile in dealing with the challenging operating environment, negative investment markets and volatile currencies. Management continues to focus on growing existing operations and extracting value from recent corporate transactions to drive enhanced future growth.

The negative investment market returns and higher interest rates in a number of markets where the Group operates had a negative impact on growth in operating earnings and some other key performance indicators. This was aggravated by weak economic growth in South Africa and Namibia and internal currency devaluations in Angola, Nigeria and Zimbabwe.

Substantial growth in Santam’s operating earnings (net result from financial services) and satisfactory growth by Sanlam Emerging Markets (SEM) and Sanlam Corporate offset softer contributions from Sanlam Personal Finance (SPF) and Sanlam Investment Group (SIG).

Key features of the 2018 annual results include:

Net result from financial services increased by 4% compared to the same period in 2017;

Net value of new covered business up 8% to R2 billion (up 14% on a consistent economic basis);

Net fund inflows of R42 billion compared to R37 billion in 2017;

Adjusted Return on Group Equity Value per share of 19.4% exceeded the target of 13.0%; and

Dividend per share of 312 cents, up 8%.

Sanlam Group Chief Executive Officer, Mr Ian Kirk said: “We are satisfied with our performance in a challenging operating environment. We will continue to focus on managing operations prudently and diligently executing on our strategy to deliver sustainable value to all our stakeholders. The integration of SAHAM Finances is progressing well. In addition, Sanlam shareholders approved the package of B-BBEE transactions, including an equity raising, at the extraordinary general meeting held on 12 December 2018. Our plan to implement these transactions this year remains on track.”

Sanlam Personal Finance (SPF) net result from financial services declined by 5%, largely due to the impact of new growth initiatives and dampened market conditions. Excluding the new initiatives, SPF’s contribution was 1% down on 2017 due to the major impact that the weak equity market performance in South Africa had on fund-based fee income.

SPF’s new business sales increased by 4%, an overall satisfactory result under challenging conditions. Sanlam Sky’s new business increased by an exceptional 71%. Strong growth of 13% in the traditional individual life channel was augmented by the Capitec Bank credit life new business recognised in the first half of 2018, and strong demand for the new Capitec Bank funeral product. The Recurring premium and Strategic Business Development business units also achieved strong growth of 20%, supported by the acquisition of BrightRock in 2017. Glacier new business grew marginally by 1%. Primary sales onto the Linked Investment Service Provider (LISP) platform improved by 5%, an acceptable result given the pressure on investor confidence in the mass affluent market. This was however, offset by lower sales of wrap funds and traditional life products.

The strong growth in new business volumes at Sanlam Sky had a major positive effect on SPF’s VNB growth, which increased by 7% (14% on a comparable basis).

Sanlam Emerging Markets (SEM) grew its net result from financial services by 14%. Excluding the impact of corporate activity, earnings were marginally up on 2017 (up 8% excluding the increased new business strain).

New business volumes at SEM increased by 20%. Namibia performed well, increasing new business volumes by 22% despite weak economic conditions. Both life and investment new business grew strongly. Botswana underperformed with the main detractor from new business growth being the investment line of business, which declined by 24%. This line of business is historically more volatile in nature.

The new business growth in the Rest of Africa portfolio was 68% largely due to corporate activity relating to SAHAM Finances, with the East Africa portfolio underperforming.

The Indian insurance businesses continued to perform well, achieving double-digit growth in both life and general insurance in local currency. The Malaysian businesses are finding some traction after a period of underperformance, increasing their overall new business contribution by 3%. New business production is not yet meeting expectations, but the mix of business improved at both businesses.

SEM’s VNB declined by 3% (up 6% on a consistent economic basis and excluding corporate activity). The relatively low growth on a comparable basis is largely attributable to the new business underperformance in East Africa.

Sanlam Investment Group’s (SIG) overall net result from financial services declined by 6%, attributable to lower performance fees at the third party asset manager in South Africa, administration costs incurred for system upgrades in the wealth management business and lower earnings from equity-backed financing transactions at Sanlam Specialised Finance. The other businesses did well to grow earnings, despite the pressure on funds under management due to lower investment markets.

New business volumes declined by 13% mainly due to market volatility and low investor confidence in South Africa. Institutional new inflows remained weak for the full year, while retail inflows also slowed down significantly after a more positive start to the year. The international businesses, UK, attracted strong new inflows (up 57%).

Sanlam Corporate’s net result from financial services increased by 4%, with the muted growth caused by a continuation of high group risk claims experience. Mortality and disability claims experience weakened further in the second half of the year, which is likely to require more rerating of premiums in 2019. The administration units turned profitable in 2018, a major achievement. The healthcare businesses reported satisfactory double-digit growth in earnings, while the Absa Consultants and Actuaries business made a pleasing contribution of R39 million.

New business volumes in life insurance more than doubled, reflecting an exceptional performance. Single premiums grew by 109%, while recurring premiums increased by a particularly satisfactory 56%.

The good growth in recurring and single premium business, combined with modelling improvements, supported a 64% (71% on a comparable economic basis) increase in the cluster’s VNB contribution.

Following a year of major catastrophe events in 2017, Santam experienced a relatively benign claims environment in 2018. Combined with acceptable growth in net earned premiums, it contributed to a 37% increase in gross result from financial services (41% after tax and non-controlling interest). The conventional insurance book achieved an underwriting margin of 9% in 2018 (6% in 2017).

As at 31 December 2018, discretionary capital amounted to a negative R3.7 billion before allowance for the planned B-BBEE share issuance. A number of capital management actions during 2018 affected the balance of available discretionary capital, including the US$1 billion (R13 billion) SAHAM Finances transaction. Cash proceeds from the B-BBEE share issuance will restore the discretionary capital portfolio to between R1 billion and R1.5 billion depending on the final issue price within the R74 to R86 price range approved by shareholders.

Looking forward, the Group said economic growth in South Africa would likely remain weak in the short to medium term future, and would continue to impact efforts to accelerate organic growth. The outlook for economic growth in other regions where the Group operates is more promising. Recent acquisitions such as the SAHAM transaction should also support operational performance going forward.

“We remain focused on executing our strategy. We are confident that we have the calibre of management and staff to prudently navigate the anticipated challenges going forward,” Mr Kirk concluded.

Details of the results for the 12 months ended 31 December 2018 are available at