Glossary of terms, definitions and major businesses

 

Technical terms and definitions

"adjusted return on Group Equity Value” or "%%%adjusted RoGEV%%%”
  the return on Group Equity Value, excluding the impact of investment market volatility. %%%Adjusted RoGEV%%% is based on the actuarial investment return assumptions at the beginning of the reporting period; 
"capital adequacy”
  capital adequacy implies the existence of a buffer against experience worse than that assumed under the FSB’s Statutory Valuation Method. The sufficiency of the buffer is measured by comparing excess of assets over liabilities for statutory reporting purposes with the statutory capital adequacy requirement. The main element in the calculation of the capital adequacy requirement is the determination of the effect of an assumed fall in asset values on the excess of assets over liabilities; 
"capital portfolio” or "balanced portfolio
  the consolidated capital of the Group, excluding working capital held by Group businesses. The capital portfolio includes the required capital of covered business as well as discretionary and other capital; 
"cost of capital
  cost of capital is calculated as the required capital at the valuation date less the discounted value, using a risk-adjusted discount rate, of the expected annual release of the capital over the life of the in-force business, allowing for the after-tax investment return on the expected level of capital held in each year; 
"covered business
  long-term insurance business written by Sanlam Personal Finance, Sanlam Emerging Markets, Sanlam UK and Sanlam Employee Benefits;
"embedded value of covered business ” or "EV”
  embedded value of covered business is an actuarially determined estimate of the value of covered business, excluding any value attributable to future new business. Embedded value of covered business consists of the required capital supporting the covered business, or adjusted net worth, plus the value of the in-force covered business less the cost of capital
"FSB
  the Financial Services Board, the regulator of insurance companies in South Africa; 
"life business
  the aggregate of life insurance business and life licence business
"life insurance business
  products provided by the Group’s long-term insurance businesses in terms of insurance and investment contracts included in the Group financial statements, but excluding life licence business
"life licence business
  investment products provided by Sanlam Personal Finance, Sanlam Investments, Sanlam Employee Benefits, Sanlam Emerging Markets and Glacier by means of a life insurance policy where there is very little or no insurance risk; 
"linked policy
  a %%%non-participating policy%%% which is allotted units in an investment portfolio. The value of the policy at any stage is equal to the number of units multiplied by the unit price at that stage less the value of unrecouped expenses; 
"market-related policy” or "contract with discretionary participating feature” 
  a participating policy which participates in non-vesting investment growth. This growth reflects the volatility of the market value of the underlying assets of the policy; 
"new business margin
  VNB as a percentage of PVNBP;
"non-life business"
  financial services and products provided by the Group, excluding life insurance business; 
"non-life linked business
  non-life linked business comprises investment products provided by Sanlam Personal Finance’s Glacier business, which is not written under a life licence; 
"%%%non-participating annuity%%%”
  a %%%non-participating annuity%%% is a policy which provides, in consideration for a single premium, a series of guaranteed regular benefit payments for a defined period; 
"%%%non-participating policy%%%”
  a policy which provides benefits that are fixed contractually, either in monetary terms or by linking them to the return of a particular investment portfolio, e.g. a linked or fixed-benefit policy; 
"normalised headline earnings
  normalised headline earnings measure the Group’s earnings, exclusive of earnings of a capital nature and fund transfers relating to the policyholders’ fund’s investment in Sanlam shares and Group subsidiaries. For the Sanlam Group, the only differences between normalised attributable earnings and normalised headline earnings are: 
 
Profits and losses on the disposal of subsidiaries, associated companies and joint ventures; 
Impairment of investments, value of business acquired and goodwill; and
The Group’s share of associates’ and joint ventures’ non-headline earnings.
  Normalised headline earnings exclude the above items that are of a capital nature. Given that the Group’s operations are of a financial nature, normalised headline earnings include investment surpluses earned on the investments held by the shareholders’ fund, resulting in volatility in normalised headline earnings
"participating annuity
  a participating annuity is a policy which provides, in consideration for a single premium, a series of regular benefit payments for a defined period, the benefits of which are increased annually with bonuses declared; 
"participating policy
  a policy which provides guaranteed benefits as well as discretionary bonuses. The declaration of such bonuses will take into account the return of a particular investment portfolio. Reversionary bonus, stable bonus, market-related and participating annuity policies are participating policies; 
"policy”
  unless the context indicates otherwise, a reference to a policy in this report means a long-term insurance or investment contract issued by the Group’s life insurance subsidiaries in accordance with the applicable legislation; 
"PVNBP
  present value of new business premiums from covered business;
"required capital
  the required level of capital supporting the covered business, based on the minimum regulatory capital requirements, plus an internal assessment of adjustments required for market, operational and insurance risk, as well as economic and growth considerations; 
"result from financial services
  profit earned by the Group from operating activities and excludes investment return earned on the capital portfolio;
"return on Group Equity Value” or "RoGEV” 
  change in Group Equity Value, excluding dividends and changes in issued share capital, as a percentage of Group Equity Value at the beginning of the period; 
"reversionary bonus policy
  a conventional participating policy which participates in reversionary bonuses, i.e. bonuses of which the face amounts are only payable at maturity or on earlier death or disability. The present value of such bonuses is less than their face amounts; 
"stable bonus policy
  a participating policy under which bonuses tend to stabilise short-term volatility in investment performance; 
"Statutory Valuation Method” or "SVM”
  valuation requirements as laid out in a Board Notice issued by the FSB, entitled "Prescribed requirements for the calculation of the value of the assets, liabilities and Capital Adequacy Requirement of long-term insurers” or the equivalent valuation requirements of the Financial Services Authority in the United Kingdom as applicable to Sanlam Investments and Pensions; 
"surrender value
  the surrender value of a policy is the cash value, if any, which is payable in respect of that policy upon cancellation by the policyholder; 
"value of in-force covered business” or "VIF” 
  the value of in-force covered business is calculated as the discounted value, using a risk-adjusted discount rate, of the projected stream of future after-tax profits expected to be earned over the life of the in-force book; 
"value of new business” or "VNB” 
  the value of new business is calculated as the discounted value, at point of sale, using a risk-adjusted discount rate, of the projected stream of after-tax profits for new covered business issued, net of the cost of capital over the life of this business; 
"white label
  white label products relate to business where the Group is principally providing administrative or life licence services to third party institutions.

Major businesses of the Group

"Channel Life”
  Channel Life Limited, a subsidiary of Sanlam Life conducting mainly life insurance business in South Africa; 
"Sanlam Investments and Pensions” 
  Sanlam Life and Pensions Limited (formerly Merchant Investors Assurance Company Limited), a wholly owned subsidiary of Sanlam UK Limited conducting mainly life insurance business in the United Kingdom; 
"Sanlam Life”
  Sanlam Life Insurance Limited, a wholly owned subsidiary of Sanlam Limited conducting mainly life insurance business
"Sanlam Limited”
  the holding company listed on the JSE Limited and the Namibian Stock Exchange; 
"Sanlam”, "Sanlam Group” or "the Group” 
  Sanlam Limited and its subsidiaries, associates and joint ventures;
"Sanlam Namibia”
  Sanlam Life Namibia, a wholly owned subsidiary of Sanlam Life conducting mainly life insurance business in Namibia;
"SDM Limited”
  Sanlam Developing Markets Limited, a wholly owned subsidiary of Sanlam Life conducting mainly life insurance business in South Africa and through its subsidiaries in Africa; 
"SEM (Pty) Limited”
  Sanlam Emerging Markets Limited, a wholly owned subsidiary of Sanlam Life conducting mainly life insurance business through its subsidiaries in Africa;
"Shiram Capital”
  Shriram Capital refers to the Group’s 33,15% holding in Shriram Financial Ventures (Chennai) PCT Limited an Indian based company that holds 78,42% of Shriram Capital Limited, resulting in a 26% effective holding by Sanlam.