Sanlam says it is not giving up or scaling back on its Saham business, even though some are seeing signs of misfiring after the R5.8 billion impairment that the company took on the Moroccan headquartered insurer in the first six months of 2020.
Sanlam paid a premium to acquire Saham in 2018. After some diplomatic hurdles that delayed the deal, Sanlam was relieved when it finally sealed the deal with outgoing former CEO, Ian Kirk, describing it as a perfect combination of the continent's biggest life and biggest general insurer that will put Sanlam in a unique position. Saham has presence in 26 African countries as well as in Lebanon.
But then came Covid-19 and the premium that Sanlam paid for synergies it was expecting to reap from the merger had to be written off as it became apparent that they would not be realised as soon as the company had expected. Saham's Lebanon operations were also written down to zero, saying that it did not expect repatriate profits to be possible in foreseeable future after the Beirut blast that took place in August.
Now, Sanlam CEO Paul Hanratty has said that the 2020 misfortunes in the Saham business – which the insurer has renamed to Sanlam Pan Africa General Insurance – are short-term events that won't change Sanlam's goal of being a pan-African insurer.
"We have acquired an excellent business that, by its very nature, has had its short-term profits hard-hit by the market volatility on the back of the Covid-19 pandemic. This is a short-term situation and is in no way a reflection on shareholders and the current and former management teams of SAHAM Finances," wrote Hanratty in a statement.
Hanratty said the As for Lebanon operations, Hanratty even though its value has been written down to zero, it is still trading, and Sanlam remains hopeful that its value will also recover in time. He said the insurer is working on expanding the product set distributed through its pan-African General Insurance network and also making life insurance a strong component of its offering.