JOHANNESBURG – South Africa’s biggest insurer by value Sanlam Ltd is working on acquisitions worth over R2 billion in the rest of Africa and other emerging markets, its chief executive said on Thursday.
These incremental acquisitions, which are in various stages of completion, would be funded from a 3.3 billion rand war chest set aside for expansion this year, Chief Executive Officer Johan van Zyl told the Reuters Africa Investment Summit.
“South Africa is fairly mature and very competitive and the real opportunity lies outside of our borders to the north,” van Zyl told the summit.
“Insurance penetration is quite low in Africa and the margins are fairly high because we don’t get the same kind of competition we get in South Africa.”
Sanlam has been bulking up its presence in Africa, where rapid economic growth has increased the number of people with money to spend on insurance to protect their wealth.
The company operates in ten African countries including oil-rich Ghana and Africa’s biggest economy Nigeria. Those operations contribute about 11% to its annual sales.
Van Zyl, who is due to step down this year after 12 years at the helm, said his company was aiming for closer to 20% contribution from those operations over the next five years.
Sanlam also reported a 3% increase in annual headline earnings to 411.6 cents per share, stock exchange filings showed.