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3rd Africa Resilience Forum looks at concrete actions to address the challenges posed by migration

3rd Africa Resilience Forum looks at concrete actions to address the challenges posed by migration

Abidjan – “I can attest that migration enriches our lives while allowing us to learn and contribute.” On Monday 4 March, the Bank’s Senior Vice-President Charles Boamah opened the third annual Africa Resilience Forum (ARF), by detailing the benefits that safe, controlled migration bring to countries of origin, transit and destination.

In the presence of the Ivorian Minister of African Integration and Ivorians Abroad, Ally Coulibaly, his colleague Mamadou Touré, Minister for the Promotion of youth and Youth Employment, and of the diplomatic corps and staff and senior management of the African Development Bank, Mr Boamah commended the choice of the conference’s theme on migration issues:

“This year’s theme, fragility, migration and resilience, could not be more pertinent, because we are going to focus on several issues, including the relationships between migration, humanitarian issues and security; youth and job creation; migration and gender; and climate change and the impact on the environment,” the Vice-President noted in his address at the Babacar Ndiaye Auditorium at the Bank’s headquarters.

Policy makers, representatives of international organisations, researchers, members of civil society and businesspeople will continue to consider migration in the context of fragility and resilience in six plenary sessions and eight parallel workshops through 5 and 6 March.

In 2017, Africans accounted for 10% of the 258 million people who migrated worldwide.

“Understanding migration is, therefore, important for the African Development Bank, because this work provides options to support programmes that will reduce migration flows at the same time as increasing yields. While most of the discourse on African migration focuses on the Mediterranean, it is important to stress that general intra-African migration accounts for 70%. This percentage rises to 80% for sub-Saharan Africa,” Boamah added.

A plenary specifically dedicated to “innovative solutions in the field of migration”, including financial solutions, will highlight how poverty and low employment prospects become powerful drivers of migration and instability.

The “Migration-Security-Development” triangle will be at the heart of discussions at another plenary session when participants will review migrant-smuggling and the impacts of tightened border controls with the goal of exploding popular myths about migration. Migration within the African continent will be discussed during a parallel session on “Intra-African migration: challenges and policies”, while another workshop will focus on “climate change, migration and building resilience”.

A single platform for discussion and debate, the Forum was organized by the Transition States Coordination Office with support from the Swiss Agency for Development and Cooperation (SDC) and the participation of the International Organization for Migration, the Office of the United Nations High Commissioner for Refugees (UNHCR), the International Labour Organization and the Making Finance Work for Africa initiative.

The debates held at the Forum will benefit from the new Country Resilience and Fragility Assessment (CRFA) tool, which uses the concept of the internal and external pressures on countries and their capacity to address these.

“Migration challenges require bold responses. In this regard, the Bank has developed tools. The CRFA is an excellent tool to build resilience in our regional member countries,” Boamah said.

The African Development Bank is also working on migration in collaboration with the African Union, the United Nations Economic Commission for Africa (UNECA), African civil society and African businesses..

The President of the Bank, Dr Akinwumi Adesina, is a member of the high-level panel on migration, chaired by ex-President of Liberia Ellen Johnson Sirleaf, and 15 others including the Executive Secretary of the Economic Commission for Africa, Vera Songwe, and former Prime Minister of Senegal Aminata Touré.

In 2011, the African Development Bank provided substantial assistance to Libyan refugees in Tunisia. In 2015, it extended its aid to refugees in Djibouti, as well as similar projects in Burundi, Mali, Nigeria, Senegal and Zimbabwe.

The Bank has also launched the “Jobs for Youth in Africa” programme, which offers young Africans employment, particularly in the agricultural sector, and to prevent youth from succumbing to the temptations of migration.

Over 400 participants from around the world are taking part in the Forum, which will propose concrete actions to address the challenges posed by migration and to help build resilience within the 21 African countries classed as fragile.


 

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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 www.sanlam.com.