Our opinion on the current state of SLM

Sanlam (SLM) is one of the largest insurance and financial services groups in South Africa. It was established in 1918 and demutualised in 1998 and then listed on the JSE and the Namibian Stock Exchange. It has operations in South Africa, the UK, America, Europe, India, and Australia as well as a range of other African countries. Its product range includes general insurance, life insurance, asset management, banking, credit, health and bancassurance. The business has four essential elements: 1. Sanlam Investment Holdings (SIH) - now 25% owned by African Rainbow Capital 2. Sanlam Emerging markets - which includes its 84,5% interest in Saham 3. Sanlam Personal Finance 4. Santam - in which it owns 61% Outside of South Africa, it has operations in 11 other African countries and Malaysia. Saham has operations in 33 French-speaking countries with 3000 staff members operating out of 700 branches offering a similar product mix to Sanlam. Sanlam also owns 26% of Shriram which is a leading provider of insurance products and financial services in India. It also made a deal to acquire 69% of Catalyst Fund Managers, a Cape-based manager of listed property assets and 100% of an Irish company, CIG Fund Management. About 50% of Sanlam's profits come from its personal finance operation which is primarily based inside South Africa. It is therefore impacted by the low levels of consumer spending in this country as well as the economic recession. Sanlam is 18% black-owned and has initiated a partnership with African Rainbow Capital (ARC) in which it intends to focus on lower- and middle-income consumers and small companies. Sanlam will provide R2bn of seed capital. On 14th June 2021, the company announced that it had acquired the Alexander Forbes group risk and retail life business for R100m. The company announced that, like Discovery, it will require employees to be vaccinated against COVID19 from 2022. In its results for the six months to 30th June 2023 the company reported the net result from financial service up 26% and headline earnings per share (HEPS) up 118%. The company said, "Cash net results from financial services increased by 30%, while net results from financial services increased by 26%. The improved performance was broad-based. Net result from financial services from our general insurance line of business increased by 38%, life insurance by 28% and credit and structuring by 36%". In an operational update for the 9 months to 30th September 2023 the company reported new business volumes up 13% and operational earnings up 35%. The company said, "The solvency position of the group remained strong and within target ranges on 30 September 2023, with a group solvency cover ratio of 170%". Sanlam is one of the JSE's foremost blue-chip shares with a history of steady growth over a long period of time. After recovering somewhat from the fall in markets due to the corona pandemic it is currently trading on a P:E of 10,93. We consider it to be good value at these levels.