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SANLAM LIMITED - Audited annual results for the year ended 31 December 2025 and dividend declaration

Sanlam Limited
Full analysis

What this filing means

Sanlam's 2025 results show record new business volumes and a 9% dividend hike, but headline earnings fell 18% due to adverse currency movements, structural base effects, and weaker Pan-Africa underwriting.

Sanlam brought in a record amount of new money from clients and increased its dividend payout. However, its overall profit dropped significantly compared to last year because of a stronger Rand, changes in its business structure, and higher insurance claims in other parts of Africa.

Bull case

  • Total new business volumes reached a record R495.9 billion, representing an 18% increase year-on-year.
  • Net client cash flows more than doubled to R126.7 billion, demonstrating strong momentum across all business lines.
  • The board declared a final gross cash dividend of 485 cents per share, a 9% increase, reflecting robust capital management despite earnings volatility.

Bear case

  • Headline earnings declined by 18% and profit attributable to shareholders fell 28%, severely impacted by the non-repeat of 2024 disposal gains and adverse ZAR strength.
  • The life insurance value of new covered business (VNB) contracted by 21% on an actual basis, impacted by a shift toward market-linked annuities and higher development costs.
  • Pan-Africa underwriting experience suffered from a sharp deterioration in claims towards the end of the year, while impairments were recorded in Afrocentric and Malaysian general insurance.
  • The upcoming transition to a new financial reporting framework in 2026 will remove investment variance smoothing, introducing greater period-to-period earnings volatility.
View original SENS announcement

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

Sanlam reported an 18% decline in headline earnings to 792 cents per share and a 21% drop in the value of new covered business, contrasting with a record 18% increase in total new business volumes to R495.9 billion. The steep earnings contraction is heavily skewed by the non-repeat of 2024's structural disposal gains and recent ZAR strength, though underlying operational resilience is evidenced by the doubling of net client cash flows and a 9% dividend increase. This is not a fundamental collapse in cash generation, as the dividend policy remains smoothed and unaffected by the impending transition to a more volatile reporting framework in 2026. Investor Takeaway: Robust top-line flows and dividend growth anchor the investment case, but near-term sentiment remains weighed down by structural earnings noise, currency headwinds, and deteriorating Pan-Africa claims. Signal-to-Price Note: The price fell 3.7% on elevated volume despite the resilient dividend, which may reflect market frustration with the 21% VNB contraction and the messy transition to a new reporting standard.

Earnings optics are distorted by structural base effects, but underlying cash generation supports the dividend. The operational thesis remains intact, though the transition to a more volatile reporting framework requires monitoring.

Decision framework

Current stance: Filing Positive

Key drivers

  • Total new business volumes reached a record R495.9 billion, representing an 18% increase year-on-year.
  • Net client cash flows more than doubled to R126.7 billion, demonstrating strong momentum across all business lines.
  • The board declared a final gross cash dividend of 485 cents per share, a 9% increase, reflecting robust capital management despite earnings volatility.

Key risks

  • Headline earnings declined by 18% and profit attributable to shareholders fell 28%, severely impacted by the non-repeat of 2024 disposal gains and adverse ZAR strength.
  • The life insurance value of new covered business (VNB) contracted by 21% on an actual basis, impacted by a shift toward market-linked annuities and higher development costs.
  • Pan-Africa underwriting experience suffered from a sharp deterioration in claims towards the end of the year, while impairments were recorded in Afrocentric and Malaysian general insurance.

What would change the view

  • Forward guidance is cut or withdrawn in the next update.
  • Cash-flow conversion deteriorates relative to reported earnings.
  • Positive thesis fails to hold through the next reporting window.

Evidence from the filing

  • Group new business volumes reached a record annual performance, increasing by 18% to nearly R500 billion.

    “Group new business volumes increased by 18% (22% on a normalised basis) to nearly R500 billion, marking a record annual performance for the group.”

  • The dividend per share increased by 9% to 485 cents, reflecting the group's commitment to shareholder returns despite earnings volatility.

    “Shareholders are advised that a final gross cash dividend of 485 cents per share was declared for the year ended 31 December 2025, an increase of 9% on the prior year dividend.”

  • Net client cash flows more than doubled to R127 billion, driven by strong contributions across all business lines.

    “Net client cash flows more than doubled to R127 billion, underpinned by strong contributions across all lines of business.”

  • The group's adjusted return on group equity value (RoGEV) of 15.7% outperformed the 14.7% hurdle rate.

    “Group equity value per share was R87,73 on 31 December 2025. RoGEV and adjusted RoGEV per share was 13,4% and 15,7% respectively for 2025, with adjusted RoGEV ahead of the hurdle rate of 14,7%.”

  • The group faces significant earnings volatility and downward pressure, evidenced by an 18% decline in headline earnings and a 28% drop in profit attributable to shareholders.

    “Headline earnings R million 16 550 20 083 (18%) Profit attributable to shareholders R million 15 941 22 240 (28%)”

  • The upcoming transition to a new financial reporting framework introduces increased earnings volatility.

    “Effective 1 January 2026, net result from financial services (NRFFS) will be replaced with operating profit, and net operational earnings with adjusted headline earnings. Both measures remove Sanlam-specific shareholders' fund adjustments and reflect full investment market movements, resulting in greater period-to-period volatility”

  • Underwriting performance in the Pan-Africa segment has deteriorated.

    “The underwriting experience in the group's Pan-Africa operations was however negatively impacted by a sharp deterioration in claims towards the end of the year. Earnings in these businesses were also negatively impacted by tax assessments following the integration of businesses in the portfolio.”

  • The group's valuation and growth prospects are challenged by impairments and a decline in the value of new covered business.

    “The group impaired the value of its investments in Afrocentric and Malaysian general insurance. ... Life insurance net value of new business (VNB) decreased by 11% on a normalised basis”
Category
Results
Event posture
No Edge
Published
Mar 12, 2026

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