‘This has nothing to do with an old boys’ network’ – Sanlam CEO Paul Hanratty on Alexander Forbes; ARC

Listed insurance company Sanlam recently bought Alexander Forbes’ life business (with an insurance premium income of R1bn) for R100m. Sanlam CEO Paul Hanratty joined the BizNews Power Hour to shed some light on the deal, on having close ties with African Rainbow Capital, and the recent string of resignations of Sanlam’s top dogs. – Claire Badenhorst 

Paul Hanratty on the Alexander Forbes deal: 

You need to understand that at the moment, group life businesses are actually all making enormous losses with the Covid pandemic. But yes, in the long run, we would expect it to make decent profits. And, of course, you know, we’re laying it on top of an existing big business. So there’ll be some capital synergies as we pull the risks together. But I think what it does is it means Alexander Forbes can focus on being capital light and take something off their balance sheet and, you know, for us, obviously, we’ve got lots of capital. It’s great for us to have this.

On why there appear to be close ties with African Rainbow Capital and Alexander Forbes: 

I mean, many of us have been in many different places. I think in this particular instance, what is true is that the CEO of Alexander Forbes used to work at Sanlam in precisely the part of the business that looks after this. And so it is somewhat natural that he would think of us and we would have relationships. And so you identify opportunities between people who understand these businesses. So, this really [has] got nothing to do with an old boys network. I think if you talk about the specific deals that happened between Sanlam and African Rainbow Capital, these were part of a 2018 package deal that was done by Sanlam. It was connected to the original BEE equity raise for the Saham transaction. And so basically the asset management deal and a couple of the other deals that followed on from that with ARC are really a remnant of that deal, which was really before my time. And it’s just been a question of closing off deals that were already supported by shareholders as long as December 2018.

On all the high profile resignations at Sanlam: 

I think just to correct you – you used the word ‘resignations’. These are not resignations. These are people who are getting to that time of their life when they are going to retire naturally. In Helena [Conradie]’s case, she’s been involved in Satrix for 20 years. I think she’s going to continue to be involved with us in some of our businesses post-going, but she wants a slightly quieter and different route, and I think one should respect that. The same is true of Lize [Lambrechts]. Lize is only going to retire sometime during the course of next year but Santam is a big listed company in its own right and so it’s natural that we would want to signal well in advance to the market and give ourselves the opportunity to follow a process to make sure that we get a suitable replacement. Lize will, if need be, stay on for a period of time to help any new person settle in. So it’s far from being a, you know, resignation.

And again, in Robert [Roux]’s case, he’s also reached that stage of his life where he wants to take things a little bit easier, and he feels that if he stays, he’s got to work really hard for the next five years, and he’s got some different plans to that. So, the point I’ve made to people is that Sanlam has been blessed to have a very good, stable, and mature management team but the problem with that is that a lot of people reach retirement at all round about the same point in time. So we always knew that there were going to be people who would move on. Fortunately, we’re blessed with talent and it creates opportunity and renewal for the organisation.

On the importance of hiring women: 

Gender is a massive issue in financial services everywhere in the world. It’s hard to compare but it definitely is an issue for us in South Africa. It’s one of many issues in South Africa relating to the diversity of our workforce, and so for us, that is a very important issue, is the whole issue of diversity in our management teams and our boards and so on. It’s something that we take very seriously.

Related articles:

(Visited 2,154 times, 10 visits today)