Fitch upgrades Sanlam Life

Fitch Ratings said it upgraded Sanlam Life Insurance Ltd.'s national long-term rating to AA(zaf) from AA-(zaf), upgraded its subordinated debt to AA-(zaf) from A+(zaf) and affirmed its national short-term rating at F1+(zaf).

The agency also upgraded parent company Sanlam Ltd.'s national long-term rating to AA-(zaf) from A+(zaf).

The outlook was changed to stable from positive.

The agency said the upgrade reflects the Sanlam group's very strong capital position and competitive new business margins relative to peers. It has also maintained its leading market share in the South African life and non-life markets.

Further supporting the ratings was the strong performance in the group's investment business, which benefited from strong equity markets and strong investment performance, which consequently resulted in a higher level of management and performance fees, Fitch said. The Sanlam group reported net fund inflows of 14.1 billion South African rand.

The agency said an offsetting factor in determining the group's ratings is the uncertainty in regulation surrounding the contractual savings market in South Africa. Fitch, however, considers Sanlam group to be well positioned for the possible changes in the contractual savings market, which include the introduction of new service providers, restructuring of intermediary commissions, improved transparency and improved early termination values.

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