Life insurer Sanlam on Thursday (12 March), reported a substantial drop in earnings for the year ended December 2019, citing poor economic conditions in a number of the markets where it operates, including South Africa.

Headline earnings of 7.48 billion, was 18% lower than in 2018, and diluted headline earnings per share fell 19% to 357,9 cents per share.

Sanlam pointed to growth of 14% and 15% respectively in net operational earnings and the net value of new covered business (VNB) written. The 37% increase in net fund inflows is a particular highlight, it said.

“We recognised from the outset that we will face a number of headwinds in 2019. Low economic growth in some of our key markets, heightened global geopolitical risks as well as volatility in investment and currency markets did not bode well for growth in our key performance indicators.

“Our diversification across geographies, market segments and lines of business provided significant resilience, enabling us to continue delivering value to all our stakeholders,” South Africa’s largest life insurer said.

Net result from financial services (net operating profit) of R9.7 billion increased by 9%, “with solid contributions from most major businesses,” it said.

“Relatively stronger investment market returns in 2019 augmented this performance, contributing to the 14% growth in net operational earnings.”

New business volumes increased by 12% despite low investor confidence in South Africa and lower investment inflows in the UK, Namibia and Kenya. Life insurance new business volumes increased marginally, investment business inflows grew by 14% and general insurance earned premiums were 22% higher, it said.

Sanlam declared a final cash dividend of 334 cents per share for the year ended December 2019, an increase of 7.1% on the prior year dividend. This represents 3% real growth in the Sanlam dividend, it said.

Read: Sanlam interim earnings plummet 31%