Sanlam Ltd., Africa\u2019s biggest insurer, is banking on India to boost profit in the short term and tide over tepid economic growth at home in South Africa.<\/p>\n\n\n\n
The Cape Town-based firm has the potential to triple the proportion of profit it derives from India within a decade, Chief Executive Officer Paul Hanratty said. Sanlam has partnered with the Shriram Capital Group in the South Asian nation since 2005 and that country now makes up about 10% of profit. <\/p>\n\n\n\n
\u201cIf you ask where our real short-term upside is, it\u2019s India,\u201d Hanratty, 62, said in an interview. \u201cWe\u2019ve got a great business with them, growing tremendously. That is our fast-growth outlet.\u201d<\/p>\n\n\n\n
India\u2019s $3.4 trillion economy is expanding almost five times quicker than Sanlam\u2019s home market, with the World Bank forecasting 6.4% growth this year. That\u2019s helped more than double the number of Indians earning over $10,000 annually to 60 million in the past nine years, luring firms such as Sanlam and BlackRock Inc. to set up local ventures.<\/p>\n\n\n\n
The partnership with Shriram, which operates a listed financing business and two insurance firms, gives it a foothold in a country with a population that exceeds Africa\u2019s. <\/p>\n\n\n\n
Sanlam\u2019s shares have climbed 33% over the past 12 months, the biggest gain in the Johannesburg stock exchange\u2019s gauge of four life assurance companies. The bourse\u2019s benchmark index has dropped almost 8% in the period. <\/p>\n\n\n\n
Sanlam depends on South Africa for about 75% of its revenue, but power shortages that have led to rotational blackouts are driving up costs and hobbling the economy. Supply chains are snarled by a dysfunctional port system and rail network bottlenecks, causing delays for both exporters and companies shipping in components.<\/p>\n\n\n\n