A journey for life Sanlam at a Glance Key features, Sanlam in a - - PDF document

A journey for life

Contents

Sanlam at a Glance

Key features, Sanlam in a nutshell, Investment case and Salient Results 1 Analysis of Return on Group Equity Value 15 Analysis of Shareholders 19 Economic Review 23

Results Presentation

Key Observations in 1H09 2 Financial & Actuarial Review 10 Review of Clusters 19 Strategic Focus 27 Outlook 29

Group Financial Review

Overview 2 Accounting Policies and Basis of Preparation 20 Group Equity Value 24 Shareholders’ Fund Financial Statements 30 Embedded Value of Covered Business 46 Group Financial Statements 55

Cluster Reviews

Sanlam Personal Finance 3 Sanlam Developing Markets 11 Sanlam UK 15 Sanlam Investments 21 Sanlam Employee Benefits 25 Sanlam Capital Markets 27 Santam 31

Key features

Earnings

Net result from financial services per share decreased by 4% Core earnings per share down 2% Normalised headline earnings per share up 34%

Business volumes

New business volumes up 1% to R51 billion Net value of new covered business down 3% to R243 million Net new covered business margin of 2,23%, up from 2,17% Net fund inflows of R7,7 billion, up 40%

Group Equity Value

Group Equity Value per share of R21,72 Annualised return on Group Equity Value per share of 5,2%

Capital management

Discretionary capital of R2,8 billion at 30 June 2009 Sanlam Life CAR cover of 2,5 times

Sanlam at a glance 2 SANLAM INTERIM RESULTS 2009

In a nutshell

Welcome

In this, our 11th year since listing on the JSE Limited and the Namibian Stock Exchange in 1998, we again have the pleasure of reporting back on a company that continues to strive for sustainable performance with the aim of providing all

• ur stakeholders with a journey for life.

The next few pages highlight the Sanlam Investment Case and summarise our performance for the six months ended 30 June 2009. We trust that this report on our performance, will further strengthen your conviction in respect of the Sanlam Investment Case.

The journey for life is everyone’s journey

Sanlam acknowledges that people are individuals and that each person is on his

• r her own, unique journey.

At Sanlam we are at your side for that journey.

The Sanlam Group

Who we are

We are a leading financial services group in South Africa. Our head office is in Bellville near Cape Town. We celebrated our 90th birthday in 2008. In nine decades Sanlam has set benchmarks for wealth creation, innovation and empowerment in South Africa and we expand on our latest achievements in these fields throughout this Report. We have offices throughout South Africa and also have business interests elsewhere in Africa, UK, Europe, India and Australia.

Thinking ahead for 2009 and beyond

“I expect that the challenging business environment of the first six months of 2009 will persist for the remainder of the year. We are nevertheless confident that our businesses are well set to continue weathering the challenges and that

• ur strategy, underpinned by the pillars of optimal capital utilisation, earnings

growth, a focus on costs and efficiencies and increased diversification and transformation, will continue to reward our stakeholders.” (Dr Johan van Zyl – Group Chief Executive)

Sanlam at a glance 3 SANLAM INTERIM RESULTS 2009

Our vision

Our vision is to be the leader in wealth creation and protection in South Africa, leading that process in the emerging markets and playing a niche role in the developed markets.

What we do

We provide financial solutions to individual and institutional clients. These solutions include individual, group and short-term insurance, personal financial services such as estate planning, trusts, home and personal loans, savings and linked products, investment, asset management, property asset management, stockbroking, risk management and capital market activities. We provide these solutions to various segments of the markets where we

• perate and offer the solutions from a number of mutually dependent

business entities in our Group. From a life insurance company with our establishment in 1918, we have, in short, grown into a diversified one-stop financial services group,

• ffering our clients a journey for life for their financial needs.

Our values

Our shared business philosophy has its roots in an entrepreneurial culture with its essence captured in traditional values of honesty, diligence, superior ethical behaviour, innovation, stakeholder values and strong ties with business partners. Our business model is focused on client-centricity and on being solution orientated.

Our strategy

Our steadfast strategy has five pillars: To apply our resources to optimise our capital structure; To implement growth opportunities through acquisitions and collaboration and increase market share through client-centric solutions and service; To continue with our tight grip on costs; To persist with our transformation initiatives to build a world-class financial services group; and To explore opportunities for diversification through a wider range of financial solutions and geographic expansion.

The Sanlam Group

continued

4 Sanlam at a glance SANLAM INTERIM RESULTS 2009

2 - Institutional cluster

The Institutional cluster includes Sanlam Investments, Sanlam Employee Benefits and Sanlam Capital Markets. › Sanlam Investments: incorporates Sanlam’s investment-related businesses in South Africa, Europe, Rest of Africa, India and Australasia. Sanlam Investments’ areas of service and solutions include traditional asset management, alternative investment solutions, property asset management, collective investments (unit trusts), private client investment management and stockbroking, multi-manager management and investment administration. › Sanlam Employee Benefits: provides life insurance, investment and annuity solutions for group schemes and retirement funds and fund administration for retirement and umbrella funds. › Sanlam Capital Markets: provides risk management, structured product solutions and associated capital market activities.

Group structure

Scope of business

The Retail cluster includes Sanlam Personal Finance, Sanlam Developing Markets and Sanlam UK. › Sanlam Personal Finance: is a major provider of a wide range of individual life insurance and personal financial services and solutions, including estate planning and trusts, home loans, personal loans, linked products, money transfer and financial services in South Africa, Namibia and the UK. › Sanlam Developing Markets: provides affordable financial services solutions primarily to the entry-level market in South Africa and to the wider financial services segments in

• ther developing markets in which Sanlam
• perates (five other African countries as well

as India). › Sanlam UK: provides life, specialist pension, investment management and financial advice services in the United Kingdom market.

1 - Retail cluster

Contribution to net Group operating result

(six months ended 30 June 2009)

Contribution to Group Equity Value

(as at 30 June 2009)

R789 million R24 887 million R388 million R10 887 million R28 335 million

Sanlam Limited

South Africa, Botswana, Namibia, United Kingdom, Kenya, Ghana, India, Tanzania, Zambia

R16 971 million

Operational areas Contribution to Group new business volumes

(six months ended 30 June 2009) South Africa, Switzerland, Australia, Ireland, United Kingdom, Namibia, Botswana, Nigeria, Kenya, Zambia, India

Sanlam at a glance 5 SANLAM INTERIM RESULTS 2009

4 - Corporate 3 - Short-term Insurance cluster

The Short-term Insurance cluster is comprised

• f a 57% shareholding in Santam, the leading

short-term insurer in South Africa, and a direct 55% interest in MiWay, the Group’s newly established direct financial services business. › Santam: focuses on the corporate, commercial and personal markets. It has a market share in excess of 20% and a countrywide infrastructure and broker

• network. Santam has related business

interests in Africa. › MiWay: focuses on short-term insurance through a direct sales channel, with the intention of adding other financial services

• ver time.

The corporate head office is responsible for the Group’s centralised functions, which include strategic direction, financial and risk management, group marketing and communications, group human resources and information technology, corporate social investment and general group services.

R82 million R5 636 million (R25) million R3 080 million

South Africa South Africa, Namibia, India

R6 179 million

6 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Sanlam – a leader in wealth creation and protection

Presence

Sanlam

Delivery Clear Strategy Core Expertise

Driving increased returns Growing profitability through (product and geographic) diversification Solid risk management Innovation resulting in market-leading solutions HR talent providing stability and proven track record Vast agency networks offering scale, flexibility and efficiency in South Africa Leading in emerging markets Niche presence in developed markets, servicing existing clients Successfully implementing the growth strategy Good operational performance over the long term Creating shareholder value –

• utperforming competitors

Investment Case

Clear strategy

Sanlam’s strategy is two-pronged. Firstly, it aims to drive increased returns through a continual focus on optimising capital, cutting costs and maximising efficiencies. Since 2005, more than R19 billion of existing capital (over 40%

• f the current Group Equity Value) has been redeployed.

The second part of the strategy is growing profitably through diversification by providing the full spectrum of financial services and diversifying revenue streams into new income markets and geographies, thus spreading the risk and underpinning a resilient performance in all market conditions. With a large stable life business at its core, Sanlam provides stability and consistency during difficult times, while its investment and capital market businesses capitalise on more favourable equity market conditions. Our vision is to be a diversified financial services group that is unrivalled in wealth creation and protection in South Africa, leading in emerging markets, and specialised in developed markets. (See diagram 1 below)

Returns (ROGEV) growth/earnings capital efficiency

Entry-level market Diversification and costs Profitable growth Application of capital Balanced portfolio Strategic investments

› › ›

Diagram 1: Sanlam strategic focus

Sanlam at a glance 7 SANLAM INTERIM RESULTS 2009

Presence

Retail

A vast internal distribution network of 1 917 tied financial advisers in South Africa servicing the middle and upper-income markets, and 1 786 agents deployed for the lower-income market in SA, provides scale, flexibility and efficiency in servicing our broad range of clients. In addition, there are more than 10 000 independent financial advisers (IFAs) who support our various businesses. There are approximately 3 million policyholders in Sanlam’s SA core life businesses, Sanlam Personal Finance and Sanlam Sky Solutions, which equals about a quarter of the economically active population in the country. Sanlam also has a strong corps of financial advisers and agents in the emerging markets with 1 821 in the rest of Africa and more than 19 500 in India. It has a niche presence in developed markets, following its SA client’s money abroad, with Merchant Investors and Principal providing life, fund management and private client solutions in the UK. In addition, Sanlam is not only increasing the breadth of its service solution offering by its entry into “non-life” financial services-related products, but is also expanding its breadth of distribution, by moving into the direct market, thereby entrenching the Group’s leadership position in the future.

Institutional

Sanlam has a vast footprint in the corporate market in South Africa with almost every large SA corporation being a client of one of our businesses. Sanlam Investments is predominantly entrenched in South Africa, and has a presence in Europe, Australia, Rest of Africa and India. This presence includes traditional asset management, alternative investment solutions, property asset management, collective investment (unit trusts), private client investment management and stockbroking, multi-manager management and investment administration. Sanlam Employee Benefits provides life insurance, investment and annuity solutions to group schemes and retirement funds. The Group’s capital markets business, Sanlam Capital Markets, provides risk management, structured product solutions and associated capital market activities.

8 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Core expertise

Solid risk management expertise is a core attribute required in running the Sanlam life and investment businesses, ensuring solid safety barriers in the

• perations. Sanlam centrally adopts conservative risk/

return measures in all its pursuits, with a minimum hurdle rate being a prerequisite for all acquisitions and new capital allocations. Capital in existing businesses is also rigorously evaluated against these return hurdles. Not only is the Group planting the seeds for future growth through a disciplined and methodical approach to ventures, it also ensures that overall returns of the Group are enhanced

• ver the long term.

Innovation has allowed the Group to pre-empt changes in an uncertain regulatory environment through market- leading solutions such as the SanlamConnect and Sanlam Life Power ranges, as well as to increase the breadth of solution and distribution offering through the solutions of Sanlam Liquid and MiWay. Sanlam has the human resources talent to boast a stable, proven track record, operating for more than 90 years in life insurance. In addition, a relatively stable executive management team has more than 150 years of combined experience in life insurance and investments.

Jun-05 Jun-04 Jun-06 Jun-07 Jun-08 Jun-09 50 100 150 200 250 300 350 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 19.8% pa 8.7% pa

SLM Life Fini SLM (CAGR) Life (CAGR)

Not only is the Group planting the seeds for future growth through a disciplined and methodical approach to ventures, it also ensures that

• verall returns of the Group are

enhanced over the long term

The Group’s employment standards have earned most of its businesses full accreditation from the international Investors in People Standards. In working to attract, motivate and retain top talent, Sanlam encourages employees to make a difference at every level within the

• rganisation through incentives which are directly aligned

with the performance of the businesses. Sanlam pioneered black economic empowerment in South Africa in 1993 and since then has been at the forefront, implementing its own empowerment and transformation strategies to ensure its long-term sustainability.

Delivery

Management has built solid foundations from which to grow the business by successfully implementing growth strategies in emerging markets in SA, the rest of Africa and India. Good and improving operational performance over the long term is evident in new business flows and a change in the mix of offerings. In creating shareholder value, Sanlam has outperformed its competitors since listing and, on average, has generated 11% higher share price returns per annum

• ver the past five years.

Investment case

continued

Creating shareholder value

Sanlam at a glance 9 SANLAM INTERIM RESULTS 2009

How we measure ourselves

The Sanlam Group’s performance measurement and financial communication philosophy is based on its values which include transparency, honesty and integrity. We are therefore passionate about providing useful, clear and value-added information in our financial statements to our shareholders and other stakeholders. This is why the Sanlam Annual Report contains significant additional information than prescribed by International Financial Reporting Standards (IFRS). We view the requirements of IFRS and other relevant regulations and legislation as the minimum compliance standards. Our disclosures are further aligned with the Group’s internal reporting structure to ensure that external users

• f the financial statements have the same insight into the Group’s financial

results as Sanlam’s management. Optimising shareholder value through maximising Return on Group Equity Value is the primary goal of the Group. Sanlam’s strategic focus areas of capital efficiency, earnings growth, costs and efficiencies, diversification and transformation are aimed at achieving this objective. The interaction of these strategies can be illustrated as follows:

Cost vs income ratio Distribution alternatives Growing alternative revenue sources Diversification

• f undeveloped

markets

ROGEV Earnings Capital efficiency

Investment returns Cost management Net top-line growth Application of capital Strategic acquisitions Regulatory capital

› ›

Investment profile

• ptimised

Appropriate reward for capital/risk Sustained top investment performance Grow assets under management Return to shareholders Appropriate risk-adjusted return

10 Sanlam at a glance SANLAM INTERIM RESULTS 2009 The performance indicators used by the Group to measure the success of the main components of its strategy are classified into the following categories: Shareholder value (all strategic focus areas) Business volumes (future earnings growth) Earnings (earnings growth and costs and efficiencies) Diversification Transformation Capital efficiency

Shareholder value

Group Equity Value

Group Equity Value (GEV) is a measure of the value of the Group’s operations, and is the aggregate of the following: The embedded value of the Group’s life insurance operations (referred to as covered business), which comprises the capital supporting these operations and the net present value of the shareholder profits to be earned from these operations’ book of in-force business; The fair value of other Group operations based on longer-term assumptions, which includes the investment management, capital markets, short-term insurance and the non-covered wealth management operations of the Group; and The fair value of discretionary and other capital. Growth in GEV per share is the most appropriate performance indicator to measure value creation for shareholders as it indicates the value that has been created in the Group during a reporting period. Given the exposure of the Group’s capital base to financial instruments, investment market performance has a significant impact

• n the growth in GEV per share. An adjusted return on GEV is therefore also disclosed to eliminate this impact of investment

markets and to more accurately reflect management’s impact on value creation.

Business volumes

Business volumes have a direct impact on the Group’s assets under management and administration and commensurately on the future earnings growth. In addition to business volume indicators, the Value of New Business indicator measures the profitability of new life insurance business written during the year.

New business volumes

New business volumes measure the total new life insurance, short-term insurance and investment business written by the Group’s operations during the year. New business contributes to the Group’s assets under management and administration and thus increases the asset base from which the Group earns financial services income.

How we measure ourselves

continued

Sanlam at a glance 11 SANLAM INTERIM RESULTS 2009

Net fund flows

Net fund flows are the aggregate of the following: New business volumes written during the year; Premiums earned from existing business in force at the beginning of the year; and Payments to clients. Net fund flows are a measure of the net business retained within the Group and have a direct impact on the Group’s assets under management and administration and commensurately the asset base on which the Group earns financial services income.

Value of new business and new business margin

The value of new business measures the net present value of future shareholder profits that the Group expects to earn from the new life insurance business written during the year. The new business margin is an indicator of the profitability of the new life insurance business written during the year.

Earnings

Sanlam uses four key indicators to assess earnings performance and

• perational efficiencies. These indicators are also presented on a per share

basis (as applicable), to reflect the earnings attributable to shareholders.

Net result from financial services

This is the earnings from the Group’s operating activities, net of minorities and tax.

Core earnings

Core earnings is the aggregate of the net result from financial services (refer above) and net investment income earned on the Group’s capital. It is an indication of ‘stable’ earnings as it incorporates the relatively stable portion of the investment return earned on the capital, being investment income (interest, dividends and rental), but excludes investment surpluses which are volatile in nature owing to fluctuations in investment markets.

Normalised headline earnings

Headline earnings is a JSE disclosure requirement, equating to total earnings excluding items of a capital nature. Headline earnings is therefore equal to core earnings plus net investment surpluses (which are volatile in nature), equity-accounted earnings and other appropriate costs/amortisations.

12 Sanlam at a glance SANLAM INTERIM RESULTS 2009 Headline earnings includes what Sanlam refers to as ‘fund transfers’. Sanlam invests policyholder funds in the shares of Group companies, but is required in terms of IFRS to show these assets only at the consolidated Group interest (in respect of shares in subsidiaries), and at zero (in respect of Sanlam shares), instead of at fair value. This results in a non-economical mismatch between policyholder assets and liabilities, for which a ‘fund transfer’ to/from the shareholders’ fund is made. Owing to this inconsistency within headline earnings, Sanlam discloses a normalised headline earnings figure, which excludes the effect of fund transfers, and therefore more accurately reflects the actual economic performance of the Group.

Administration cost ratio

The administration cost ratio measures the administration costs incurred by the Group as a percentage of financial services income after sales remuneration. This ratio is an indicator of the cost and operational efficiency of the Group.

Diversification

Diversification is measured through an analysis of the net result from financial services and new business volumes based on: Geographical exposure; Market segmentation; and Type of business

Transformation

Transformation is inextricably linked to the long-term sustainability of the Group. The Annual Report includes an abridged Sustainability and Corporate Citizenship Report which measures the Group’s performance on the triple bottom-line basis (economic, social and environmental performance) as well as against the targets of the Financial Sector Charter in South Africa. The full version of the Sustainability and Corporate Citizenship Report is published on the Sanlam website (www.sanlam.co.za).

Capital efficiency

The Group’s actions in respect of capital management are covered in detail in the financial review.

How we measure ourselves

continued

Sanlam at a glance 13 SANLAM INTERIM RESULTS 2009

Executive Review

The Sanlam Group has shown pleasing resilience in challenging markets to record a solid operational performance for the six months ended 30 June 2009. The strategic diversification into different market segments and solution offerings, as well as the effect of prudent practices and assumptions followed in the past, shielded the Group from the most severe impact of the economic downturn. 2009 2008 ∆ SANLAM GROUP Earnings: Net result from financial services per share cents 60,4 62,6 (4%) Core earnings per share (1) cents 87,5 89,7 (2%) Normalised headline earnings per share (2) cents 78,5 58,8 34% Diluted headline earnings per share cents 82,6 94,5 (13%) Net result from financial services R million 1 234 1 334 (7%) Core earnings (1) R million 1 789 1 913 (6%) Normalised headline earnings (2) R million 1 605 1 254 28% Headline earnings R million 1 664 1 955 (15%) Group administration cost ratio (3) % 26,8 28,0 Group operating margin (4) % 15,1 17,8 Gross business volumes: New business volumes R million 51 485 50 985 1% Net fund flows R million 7 677 5 470 40% Net new covered business Value of new covered business R million 243 250 (3%) Covered business PVNBP (5) R million 10 906 11 501 (5%) New covered business margin (6) % 2,23 2,17 Group Equity Value: Group Equity Value (7) R million 44 490 45 238 (2%) Group Equity Value per share (7) cents 2 172 2 213 (2%) Annualised return on Group Equity Value per share (7),(8) % 5,2 (1,7) Adjusted annualised return on Group Equity Value per share (7) % 12,2 12,4 SANLAM LIFE INSURANCE LIMITED Shareholders’ fund (7) R million 31 620 34 419 Capital Adequacy Requirements (CAR) (7) R million 8 200 8 075 CAR covered by prudential capital (7) times 2,5 2,7

Notes

less dividends received from non-operating associates, but excluding fund transfers. Headline earnings include fund transfers.

• f Group Equity Value per share at the beginning of the period.

Salient Results

for the six months ended 30 June 2009

Sanlam at a glance 15 SANLAM INTERIM RESULTS 2009

Analysis of Return on Group Equity Value

16 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Analysis of Return on Group Equity Value: 1H09

Component of Group Equity Value (weighting) Actual Return Weighted ROGEV SANLAM PERSONAL FINANCE

45,8%

(R20,4bn)

5,6% 2,6%

(5,6% x 0,464*) Dec 2008: 46,4%

SANLAM DEVELOPING MARKETS

6,9%

(R3,1bn)

6,4% 0,4%

(6,4% x 0,062*) Dec 2008: 6,2%

SANLAM UK

3,3%

(R1,5bn)

(14,3%) (0,5%)

(-14,3% x 0,034*) Dec 2008: 3,4%

INSTITUTIONAL CLUSTER

24,5%

(R10,9bn)

8,4% 2,1%

(8,4% x 0,255*) Dec 2008: 25,5%

SHORT-TERM INSURANCE

12,7%

(R5,6bn)

21,2% 2,5%

(21,2% x 0,117*) Dec 2008: 11,7%

OTHER

6,8%

(R3,0bn)

(28,4%) (2,2%)

(-28,4% x 0,068*) Dec 2008: 6,8%

*Weighting of GEV at beginning of year 1H09 ANNUALISED ACTUAL ROGEV: 2,6% + 0,4% – 0,5% + 2,1% + 2,5% - 2,2% = 4,9% 1H09 ANNUALISED ROGEV PER SHARE: = 5,2%

Analysis of Adjusted Return on Group Equity Value: 1H09

Component of Group Equity Value (weighting) Adjusted Return Weighted ROGEV SANLAM PERSONAL FINANCE

45,8%

(R20,4bn)

13,7% 6,4%

(13,7% x 0,464*) Dec 2008: 46,4%

SANLAM DEVELOPING MARKETS

6,9%

(R3,1bn)

21,8% 1,4%

(21,8% x 0,062*) Dec 2008: 6,2%

SANLAM UK

3,3%

(R1,5bn)

(8,7%) (0,3%)

(-8,7% x 0,034*) Dec 2008: 3,4%

INSTITUTIONAL CLUSTER

24,5%

(R10,9bn)

15,5% 4,0%

(15,5% x 0,255*) Dec 2008: 25,5%

SHORT-TERM INSURANCE

12,7%

(R5,6bn)

9,4% 1,1%

(9,4% x 0,117*) Dec 2008: 11,7%

OTHER

6,8%

(R3,0bn)

(8,5%) (0,8%)

(-8,5% x 0,068*) Dec 2008: 6,8%

*Weighting of GEV at beginning of year 1H09 ANNUALISED ADJUSTED ROGEV: 6,4% + 1,4% – 0,3% + 4,0% + 1,1% - 0,8% = 11,8% 1H09 ANNUALISED ADJUSTED ROGEV PER SHARE: = 12,2%

Analysis of Return

Sanlam at a glance 17 SANLAM INTERIM RESULTS 2009

Analysis of Return

continued

GEV Earnings (Rm) ROEGEV vs Target

Cumulative ROGEV exceed cost of capital rate since listing, but recently falling short against target (market impact).

500 1000 1500 2000 2500 3000

VNB Exp return on VIF Exp variance Assumpt changes Exp inv returns

• n NW

LIFE EARNINGS Other ops Other capital GEV (ADJUSTED) Eco assumpt. changes Tax & other Inv var (EV) Inv var (Other ops) Other Capital TOTAL GEV EARNINGS 243 839 289 17 546 1 934 792 (134) 2 592 (1 020) (15) (129) (2) (341) 1 085

11.8% 4.9%

50 100 150 200 250 300 350 450 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1H09*

Target return (RFR + 400bps) Cost of Capital (RFR + 300bps) Actual

400 2008

*Annualised

18 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Calculation of Annual Return on Equity (ROE)

2005 2006 2007 2008 2009 IFRS NAV (Opening balance) 19 685 25 020 29 121 29 334 27 651 Add: Consolidation reserve 2 820 1 931 1 859 1 843 539 Equity base 22 505 26 951 30 980 31 177 28 190 IFRS profit for the year attributable to shareholders 10 927 6 945 5 494 2 494 1 606 Less: Fund transfers (730) (205) 366 (736) (59) Add: Items recognised directly in equity: Share based payments 64 74 74 134 45 Foreign currency translation differences 81 318 (99) 60 (303) Net realised investment surpluses on treasury shares 25 (188) (288) (307) (146) Equity earnings 10 367 6 944 5 547 1 645 1 143 ROE (annualised) 46.1% 25.8% 17.9% 5.3% 8.3%

Calculation of Cumulative Internal Rate of Return (IRR)

2005 2006 2007 2008 2009 Movement in shareholders’ fund Opening balance 22 505 26 951 30 980 31 177 28 190 Equity earnings 10 367 6 944 5 547 1 645 1 143 Dividends paid (1 363) (1 533) (1 768) (1 968) (1 978) Net shares bought back (4 558) (1 382) (3 582) (2 664) 168 Closing balance 26 951 30 980 31 177 28 190 27 523 (22 505) 5 921 (26 951) 2 915 2 915 (30 980) 5 350 5 350 5 350 (31 177) 32 822 32 822 32 822 32 822 IRR up to December 2008 25.5% 16.9% 11.9% 5.3%

Analysis of Return

continued

Sanlam at a glance 19 SANLAM INTERIM RESULTS 2009

Shareholder Analysis

20 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Geographic split of shareholders

Geographic split of investment managers & company related holdings – June 2009

Region Total shareholding % of issued capital South Africa 1 633 589 322 75.63 United States of America & Canada 350 804 125 16.24 United Kingdom 33 097 785 1.53 Rest of Europe 35 350 164 1.64 Rest of the World¹ 107 158 604 4.96 Total 2 160 000 000 100.00

¹ Represents all shareholdings except those in the above regions

Geographic split of beneficial shareholders – June 2009

Region Total shareholding % of issued capital South Africa 1 616 635 021 74.84 United States of America & Canada 334 383 886 15.48 United Kingdom 19 793 986 0.92 Rest of Europe 68 016 748 3.15 Rest of the World¹ 121 170 359 5.61 Total 2 160 000 000 100.00

¹ Represents all shareholdings except those in the above regions

Geographic split of beneficial shareholders – June 2009

TOTAL AFRICAN HOLDING SPLIT OF BENEFICIAL SHARES

Africa 76.2% Rest of the World 23.8% Swaziland 0.3% South Africa 98.2% Namibia 1.4% Asia/Pacific 2.7% Rest of the World 97.3% UAE 34.9% Australia 22.5% Singapore 15.2% Remainder 27.5%

TOTAL ASIA/PACIFIC HOLDING SPLIT OF BENEFICIAL SHARES TOTAL EUROPEAN HOLDING SPLIT OF BENEFICIAL SHARES

UK/Europe 4.1% Rest of the World 95.9% Netherlands 32.1% UK 22.5% Ireland 11.5% Remainder 33.9% North America 15.7% Rest of the World 84.3% Bermuda 1.0% USA 96.3% Canada 2.5% Remainder 0.2%

TOTAL NORTH AMERICAN HOLDING SPLIT OF BENEFICIAL SHARES

Sanlam at a glance 21 SANLAM INTERIM RESULTS 2009

Shareholder categories

An analysis of beneficial shareholdings supported by the Section 140a enquiry process confirmed the following beneficial shareholder types:

Beneficial shareholder categories – June 2009

Category Total shareholding % of issued capital Pension Fund 604 453 289 27.98 Unit Trusts/Mutual Funds 503 236 175 23.30 Private Investors 464 625 094 21.51 Black Economic Empowerment 226 000 000 10.46 Insurance Companies 183 573 950 8.50 Other Managed Funds 92 499 010 4.28 Foreign Government 26 749 358 1.24 Custodians 16 307 324 0.75 Investment Trust 7 399 931 0.34 Delivery by Value (Colateral) 3 469 477 0.16 American Depository Receipts 2 906 620 0.13 Local Authority 2 267 330 0.10 Charity 1 745 482 0.08 University 1 554 629 0.07 Remainder 23 212 331 1.10 Total 2 160 000 000 100.00

Beneficial shareholders split by category¹ – June 2009

Pension Fund 28.0% Unit Trusts/ Mutual Funds 23.3% Private Investors 21.5% Black Economic Empowerment 10.5% Insurance Companies 8.5% Other Managed Funds 4.3% Remainder 3.9%

¹ Includes categories above 1% only

22 Sanlam at a glance SANLAM INTERIM RESULTS 2009 Analysis into institutional attributes broadly indicates the following split of investment approach within the shareholder base:

Analysis of investment styles¹ – June 2009

Growth 14.34% BEE 10.46% Value 34.26% Retail 19.59% Index 6.79% Remainder 12.39% GARP 2.17%

Analysis of investment styles

¹ Includes categories above 1% only

Sanlam at a glance 23 SANLAM INTERIM RESULTS 2009

Economic Review

24 Sanlam at a glance SANLAM INTERIM RESULTS 2009

Economic and Financial Markets Review

Global and domestic economic and financial conditions during the first half of 2009 should be viewed in the light

• f the after effects of the financial crisis that overwhelmed

the world economy towards the end of 2008. The unprecedented nature of the developing crisis since the demise of Lehman Brothers in the USA in September 2008 made it extremely difficult for both policy makers and financial markets to assess the possible future course

• f events, and both groups defaulted to assuming the

worst and acting accordingly. Concern regarding the impact of the financial crisis on real economic activity increased as the evidence of a severe downturn continued to pour in. International trade and the global manufacturing sector were hit especially hard, and it gradually became clear that the world economy was heading for its first recession in the post World War II era. However, policy makers quickly signaled their determination to stabilize and turn around the situation by taking extraordinary steps. Central banks injected vast amounts of liquidity into the financial system and lowered their policy interest rates sharply to approach zero in some instances. They also took the unusual step of embarking on so-called quantitative easing, purchasing large amounts of government and other bonds without sterilizing its impact

• n the supply of money.

Apart from injecting large amounts of capital into ailing banks and providing a range of guarantees, governments adopted large fiscal stimulus packages to boost domestic demand through increased spending, especially on infrastructure development, as well as some tax relief. In most countries the effect of the fiscal stimulus will be felt well into 2010 and it is therefore premature to speculate

• n the necessity or not of a further stimulus package.

These steps eventually paid off and volatility in financial markets declined steadily as confidence returned. As a growing conviction that the economy was over the worst took hold in the second quarter, equity markets in particular bounced back strongly. The Morgan Stanley World Index increased by 57% from its low in March and by 17% from 31 December 2008. The JP Morgan Emerging Market Free Index rose by an astonishing 78% from its March-low and by 49% since the beginning of the year South Africa followed the global trend quite closely, with the economy contracting by 6,4% quarter-on-quarter in the first quarter of 2009 and by 3% in the second quarter at a seasonally adjusted and annualized rate. It therefore finds itself in the category of countries that are lagging in recovering from the impact of the financial crisis, with the second quarter reflecting a slower rate of decline rather than an outright return to positive growth. The loosening in monetary policy, with the repo rate having been reduced by 450 basis points since December 2008, and fiscal policy turning more expansionary, is therefore apparently slow in taking effect. This could be due to the fact that unlike many other emerging economies, the South African economy was already in a down turn that started late in 2006 and that was still gaining momentum when global conditions turned negative late in 2008. The economy hardly achieved positive growth in the third quarter of last year and in fact contracted if the agricultural sector is excluded. Although export dependent sectors such as mining and manufacturing were hardest hit, it is the deterioration in household finances and spending that stands out. Having started to decline in the third quarter of 2008, the rate of decline in the real disposable income of households accelerated to -4,5% (seasonally adjusted and annualised) in the first quarter of 2009 on the back of rising unemployment. Job losses amounted to 475 000 in the first half of 2009, and the dire straits in which consumers find themselves are well illustrated by the decline of 4,4% in real retail sales in the first half of 2009 compared with the corresponding period in 2008. Households are finding it difficult to reduce their debt burden, with the ratio of debt to disposable income still at 76,7% compared with its peak of 78,2% a year ago. The cost of servicing this debt has therefore likewise been slow in falling in spite of lower interest rates, with the benefit of

Sanlam at a glance 25 SANLAM INTERIM RESULTS 2009

Economic and Financial Markets Review

continued

the latter being curbed by commercial banks tightening their lending standards. The result has been continued pressure on the discretionary income of households. However, as in much of the global economy the first signs

• f economic conditions stabilizing have become evident,

as reflected in the turn around in the Reserve Bank’s leading indicator. A return to positive growth late in 2009

• r early in 2010 seems possible. The upturn is

nevertheless likely to be slow in gaining traction in view of the starting conditions being rather unfavourable – unlike with the previous upturn the South African economy will be burdened from the start with a sizeable current account deficit, and as already mentioned the capacity of households to respond to lower interest rates by increasing debt and spending is limited. Domestic financial markets have generally followed global trends, with the notable exception of the bond market. Equity prices on the JSE have recovered along with world markets, although less buoyantly than emerging markets, being 39% up from their low in early March, but as at a global level further increases are likely to be constrained by the uninspiring outlook for company earnings. However, long term bond yields rose sharply from the start

• f the year, with the 10-year generic government bond yield

increasing from approximately 7,25% to 9,25% at its peak. The increase was mainly the result of inflation expectations being adjusted upwards and the rapid deterioration in government revenue and the concomitantly higher public sector borrowing requirement. In summary, although business conditions can be expected to be relatively more benign in the second half

• f 2009 compared with the first half of the year, they still

require more caution than usual, and the recovery will in all likelihood only become visible in 2010.

Results Presentation 1 SANLAM INTERIM RESULTS 2009

SANLAM INVESTOR PRESENTATION

2009 Interim Results

Agenda

Key Observations in 1H09 Financial Review Review of Clusters Strategic Focus Outlook

2 Results Presentation SANLAM INTERIM RESULTS 2009

KEY OBSERVATIONS IN 1H09

Headlines for 1H09

Highlights Stable Profits Stable New Bus Volumes Continued Net Inflows Stable New Bus Margins Macro Themes Economic Recession Pressure

• n PDI

Volatile Equity Markets Bond Yields, Currency & Commodities Business Specific Pressure

• n Retail

Market Persistency Cost Containment Lower Average Asset Levels

Results Presentation 3 SANLAM INTERIM RESULTS 2009

Headlines for 1H09 – Highlights

Highlights Satisfactory and resilient operational performance in light of challenging conditions

What Sanlam Delivered in 1H09

Earnings per share: Core earnings -2% Normalised headline earnings +34% Business Volumes: New business volumes (ex-White label) +3% Covered business -12%; VNB -3%; margin of 2,23% Investment flows +6% Net inflows of R8bn (ex-White label), net life inflows of R1bn Group Equity Value of 2 172 cps: Adjusted ROGEV of 12,2% (annualised)

4 Results Presentation SANLAM INTERIM RESULTS 2009

Headlines for 1H09 – Macro Themes Weakening Economy

Retail customer under strain

Macro Themes Tough economic and financial conditions adversely impacting operating environment Growth in retail sales, real GDP and personal disposable income

• 10
• 5

5 10 15 20 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09

Growth y-o-y in real retail sales Growth y-o-y in real GDP Growth y-o-y in real personal disposable income

%

Results Presentation 5 SANLAM INTERIM RESULTS 2009

Bond Yields & Interest Rates

LT rates up 190bps : Negative impact on GEV Prime rate down 400bps : Relief still to manifest in higher PDI

Lower Relative Equity Levels

Impact on investment values Pressure on asset-based earnings

Major SA indices (re-based = 100)

50 70 80 90 100 110 120 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Dec-08

Fini Swix Alsi

60 Feb-09 Apr-09 Oct-08

SA Govt 10-year bond yield, interest rates and CPI (%)

6 8 9 13 14 15 16 Jun-08 Aug-08 Dec-08

SA Government 10-year yield (lhs) Prime interest rate (lhs) CPI (rhs)

7 Feb-09 Apr-09 Oct-08 10 11 12 Jun-09 8 10 12 14 2 4 6

6 Results Presentation SANLAM INTERIM RESULTS 2009

Stronger Rand

Negative impact on the GEV and operating results reported in respect

• f Group’s international businesses

Declining Commodity Prices

Negative impact on resource-driven African economies where Sanlam operates

Basket of currencies relative to SA Rand (re-based = 100)

60 100 110 120 130 Jun-08 Aug-08 Dec-08

Pound Sterling / ZAR Botswana Pula / ZAR Indian Rupee / ZAR

Feb-09 Apr-09 Oct-08 70 80 90 Jun-09

All Commodities Index – US$ (2000 = 100)

100 200 220 240 260 280 300 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Dec-08 180 Feb-09 Apr-09 Oct-08 160 140 120

Results Presentation 7 SANLAM INTERIM RESULTS 2009

Headlines for 1H09 – Business Specific New Business Growth

Pressure on Middle-Income Market SPF’s SA sales down by 12% from 1H08

Business Specific Retail customer under pressure (deteriorating persistency), but operational resilience supported by diversified nature

• f business and prudent practices

4.5 5.7 5.2 4.4 5.8 5.1

SPF New business flows (SA only) : Life vs Non-life (Rbn)

1H07 1H08 1H09

Life Non-Life

8 Results Presentation SANLAM INTERIM RESULTS 2009

Persistency

Marginal deterioration in SPF

Persistency

Sustained Quality of New Business Sanlam’s share of total industry lapses have declined over the past year (new business market share broadly static)

Sanlam’s market share of total retail lapses (SPF and SDM)

Lapses within first year Total Lapses

Jun-08 Sep-08 Dec-08 Mar-09

16,3% 5,9% 16,0% 7,6%

Lapses, Surrenders & Fully Paid-Ups (Rm)

Jan Feb Jun Mar Apr May

1H09 - actual month-by-month 1H07 monthly average 1H08 monthly average

Results Presentation 9 SANLAM INTERIM RESULTS 2009

Persistency

Positive Net Life Flows Ongoing improvement in net life cash flows : Positive retail net life cash flows & lower institutional net outflows

• 5

1 4

Net life cash flows (Rbn)

2 3

• 1
• 2

Net Flows - Life (lhs) Life net flows as % of ph liabilities (rhs)

1H09* 2005 2006 2007 2008

• 3
• 4

1% 4% 0% 2% 3%

• 1%
• 2%
• 3%
• 4%
• 2,7%
• 2,0%
• 1,3%
• 0,1%

1,2%

Persistency

Successful Retention of Business Level of retention of maturing policies maintained

Retention as percentage of maturities (SPF)

1H09 1H07 FY07 1H08 FY08 7,4% 6,3% 3,5% 3,4% 4,3%

Life - Retention Non-life - Retention

38,4% 39,6% 41,0% 40,5% 41,5% 45,8% 45,9% 44,5% 43,9% 45,8% * Annualised

10 Results Presentation SANLAM INTERIM RESULTS 2009

Focus on Cost Efficiencies

Intensified focus on costs in light of financial market crises and recessionary environment

SANLAM GROUP

Financial Review

Group administration ratio (%)

1H09 2003 2004 2005 2006 2007 2008 33,6% 26,8% 28,4% 27,8% 27,1% 29,1% 31,4%

Results Presentation 11 SANLAM INTERIM RESULTS 2009

Changes in Key Assumptions

Change in asset mix (10% reduction in equity exposure) – Release R900m in excess capital – Increase CoC, R313m reduction in VIF RDR down from Jun-08 (impact on relative VNB & margins) – 150 bps (SPF) – 230 bps (Sky) RDR up from Dec-08 (impact on ROGEV) – 190 bps (SPF) – 140 bps (Sky)

Salient features

1H09 1H08 ∆ Group Equity Value* cps 2 172 2 213 (2%) Annualised ROGEV per share* % 5,2 (1,7) Annualised Adjusted ROGEV per share* % 12,2 12,4 Net operating profit R mil 1 234 1 334 (7%) Core earnings R mil 1 789 1 913 (6%) cps 87,5 89,7 (2%) Normalised headline earnings R mil 1 605 1 254 28% cps 78,5 58,8 34% Headline earnings R mil 1 664 1 955 (15%) cps 82,6 94,5 (13%) New business volumes R mil 51 485 50 985 1% Net fund flows R mil 7 677 5 470 40% SIM AUM* R bn 403 409 (1%) Net value of new covered business R mil 243 250 (3%) Net new covered business margin % 2,23 2,17

* Comparative figures are as at 31 December 2008

12 Results Presentation SANLAM INTERIM RESULTS 2009

Key Financial Driver

Growth in value per share Long term target : Cumulative Return on Group Equity Value to exceed cost of capital (RF + 300bp) by >100bp Annual target : Adjusted Return on Group Equity Value to exceed cost of capital (RF + 300bp) by >100bp Adjusted for the effect of economic changes and market volatility

• n shareholder funds

Management Focus on ROGEV

Returns (ROGEV) Optimal Application Strategic Investments Return of Excess Capital Efficiency Growth/ Earnings Net Business flows Diversification Operational Efficiencies Maximise profitable growth Maximise capital efficiencies

Results Presentation 13 SANLAM INTERIM RESULTS 2009

Business Flows

Rand Million 1H09 1H08 ∆ Net Flows 1H09 By business Personal Finance 14 700 15 824 (7%) 3 411 Developing Markets 1 316 1 214 8% 610 Sanlam UK 955 807 18% (111) Institutional Cluster 25 550 23 305 10% 2 571 Santam 6 179 6 085 2% 1 676 By license Covered business 7 342 8 305 (12%) 1 032 Life License 991 686 44% 292 Investment 34 188 32 159 6% 5 157 Short-term insurance 6 179 6 085 2% 1 676 48 700 47 235 3% 8 157 White label 2 785 3 750 (26%) (480) Total 51 485 50 985 1% 7 677

Business Flows

Covered business

Rand Million 1H09 1H08 ∆ Net Flows 1H09 Personal Finance 5 433 6 014 (10%) 929 SA recurring premiums 452 505 (10%) SA single premiums 4 609 5 315 (13%) Non-SA operations 372 194 92% Developing Markets 1 316 1 214 8% 610 SA recurring premiums 370 352 5% Non-SA operations 681 549 24% 1 051 901 17% SA single premiums 265 313 (15%) Sanlam UK 451 807 (44%) (8) Employee Benefits 142 270 (47%) (499) Total (ex-White label) 7 342 8 305 (12%) 1 032

14 Results Presentation SANLAM INTERIM RESULTS 2009

Value of New Covered Business

Rand Million 1H09 1H08 ∆ Value of New Business 276 290 (5%) Personal Finance 135 160 (16%) Developing Markets 136 113 20% Sanlam UK

• 3

(100%) Employee Benefits 5 14 (64%) Net of minorities 243 250 (3%) New Business Margin 2,41% 2,39% Personal Finance 1,80% 1,98% Developing Markets 4,83% 4,85% Sanlam UK 0,00% 0,36% Employee Benefits 0,71% 1,58% Net of minorities 2,23% 2,17%

Business Flows

Investments

Rand Million 1H09 1H08 ∆ Net Flows 1H09 Retail Cluster 9 771 9 810 0% 2 379 SA Operations 5 153 5 739 (10%) Non-SA Operations 4 618 4 071 13% Institutional Cluster 24 417 22 349 9% 2 778 Segregated funds 7 920 6 379 24% Multi-Manager 1 768 2 099 (16%) Private Investments 3 133 4 016 (22%) Collective Investment 10 269 8 839 16% SA Operations 23 090 21 333 8% Non-SA Operations 1 327 1 016 31% Total (ex-White label) 34 188 32 159 6% 5 157

Results Presentation 15 SANLAM INTERIM RESULTS 2009

Net Operating Profit

Rand Million 1H09 1H08 ∆ Retail cluster 789 793 (1%) Personal Finance 691 678 2% Developing Markets 85 78 9% Sanlam UK 13 37 (65%) Institutional cluster 388 404 (4%) Investment Management 264 287 (8%) Employee Benefits 65 83 (22%) Capital Markets 59 34 74% Santam 118 188 (37%) MiWay (36) (23) (57%) Corporate and other (25) (28) 11% Total 1 234 1 334 (7%)

Net Operating Profit (continued)

Rand Million 1H09 1H08 ∆ Net result from financial services 1 234 1 334 (7%) Add back : New business strain 602 491 23% Add back : Start-up costs (MiWay) 36 23 57% Net profit on comparable basis 1 872 1 848 1% Cents per share 91,6 86,7 6% Retail Cluster 1 364 1 265 8% Institutional Cluster 415 423 (2%) Santam 118 188 (37%) Corporate and other (25) (28) 11%

16 Results Presentation SANLAM INTERIM RESULTS 2009

Income Statement

Rand Million 1H09 1H08 ∆ Net operating profit 1 234 1 334 (7%) Investment income 555 579 (4%) Core earnings 1 789 1 913 (6%) Cents per share 87,5 89,7 (2%) Net investment surpluses 23 (447) Net equity accounted headline earnings 10 (4) Project expenses (15) (40) Discontinued operations

• (35)

STC, amortisation & BEE costs (202) (133) Normalised headline earnings 1 605 1 254 28% Cents per share 78,5 58,8 34%

Group Equity Value

Rand Million Jun 2009 Dec 2008 Covered business 27 773 62% 28 591 63% Personal Finance 18 939 19 574 Developing Markets 3 040 2 796 Sanlam UK 685 680 Employee Benefits 5 109 5 541 Other operations 13 637 31% 13 560 30% Retail Cluster 2 223 2 287 Institutional Cluster 5 778 6 000 Short-term insurance 5 636 5 273 Discretionary capital 2 785 6% 2 100 5% Other 295 1% 987 2% Total 44 490 100% 45 238 100% GEV (cps) 2 172 2 213

Results Presentation 17 SANLAM INTERIM RESULTS 2009

Composition of Group Equity Value

R21,72 per share

SPF 46% SDM 7% SUK 3% SI 12% Short-term insurance 13% Discretionary capital & Other 7% Value of in-force 30% FV of Covered Businesses 32% Other Group Operations 31% Discretionary Capital & Other 7% SEB 11% SCM 1%

Discretionary Capital

Analysis of Change Rand Billion Balance – Dec 2008 2,1

Change in required capital

0,9

Corporate activity

(0,4)

• Channel minorities

(0,2)

• Other

(0,2)

Investment return & other adjustments

0,2 Balance – June 2009 2,8

18 Results Presentation SANLAM INTERIM RESULTS 2009

Group Solvency

Jun 2009 Dec 2008 Sanlam Life

Life CAR (Rm)

8 200 8 075

Statutory capital (Rm)

20 712 21 422 CAR cover (x) 2,5 2,7

Required capital (Rm)

16 228 16 863

• Capital

14 264 14 779

• Debt

1 964 2 084 CAR cover (x) 2,0 2,1 Santam

Solvency level (% of premiums)

42% 44% Sanlam Capital Markets

Capital (Rm)

450 400 Capital at risk (% utilised) 59% 77%

Return on Group Equity Value

Rand Million Jun 2009 Jun 2008 Covered business 770 5,5% 998 7,1% Personal Finance 446 4,6% 490 4,9% Developing Markets 86 6,2% 180 17,4% Sanlam UK 4 1,2% 139 32,5% Employee Benefits 234 8,6% 189 7,3% Other operations 790 12,0% (1 692) (20,7%) Retail Cluster 18 1,6% 31 3,4% Institutional Cluster 241 8,1% (301) (8,1%) Short-term insurance 531 21,2% (1 422) (39,6%) Discretionary capital & other capital (475) 119 Total 1 085 4,9% (575) (2,2%) (cps) 5,2% 0,0% cps (adjusted basis) 12,2% 13,6%

Results Presentation 19 SANLAM INTERIM RESULTS 2009

Summary

Strategic objectives are being achieved: Business volumes: – Satisfactory new business volumes (+3%), net cash inflows – Maintained value of new business & improved margins (+6bps) Profitability: Commendable operating profit result Operational efficiencies: Improved admin ratio Capital management: Value adding initiatives – De-risking balance sheet unlocked further R900m – Utilised R400m on ventures to further grow & diversify Group Focus areas: Capital efficiency & optimal application of discretionary capital Bedding down new ventures

BUSINESS CLUSTERS

Operational Review

20 Results Presentation SANLAM INTERIM RESULTS 2009

A Portfolio of Diversified Assets

SPF 46% SDM 7% SI 12% SEB 11% SCM 1% Short-term 13% Discretionary capital & Other 7% SUK 3%

• 1. Retail Cluster (SPF, SDM & SUK)

SPF 46% SDM 7% SUK 3%

Stability & Growth (Optimise Capital)

Results Presentation 21 SANLAM INTERIM RESULTS 2009

Sanlam Personal Finance (SPF)

“Satisfactory performance in difficult business conditions”

Overall

Profits marginally up Admin costs contained Total sales down 7%, risk up 7% VNB 16% lower, margins 1,80% Deliberate slowdown in Retail Credit Net cash inflow up 54%

Key Challenges

Business environment Manage persistency / retention Margin pressure

Snapshot

1H09 %∆ Net Operating Profit ▲ R691m +2% New business flows ▼ R14 700m

• 7%
• SA Recurring

▼ R487m

• 13%
• SA Single

▼ R9 727m

• 12%
• Non SA

▲ R4 486m +5% PVNB Premiums* ▼ R7 488m

• 7%

VNB* ▼ R135m

• 16%

Margin* ▼ 1,80% vs 1,98% Annualised ROGEV 5,6% Annualised Adj ROGEV 13,7%

* Covered business only

Sanlam Developing Markets (SDM)

“Another strong performance”

Overall

Both VNB and profits up Deliberate reduction in lower margin direct business in SA Bancassurance partnerships in Africa Successful launch of NEW Indian distribution initiative

Key Challenges

Economic conditions Consolidation of Sky and Channel Retention Maintaining RoA VNB margins Productivity / volumes in India

Snapshot

1H09 %∆ Net Operating Profit ▲ R85m +9% New business flows* ▲ R1 051m +17%

• SA Recurring

▲ R370m +5%

• Non-SA

▲ R681m +24% PVNB Premiums ▲ R2 814m +21% VNB ▲ R136m +20% Margin ▼ 4,83% vs 4,85% Annualised ROGEV 6,4% Annualised Adj ROGEV 21,8%

* Excludes White Labels and Non-core businesses

22 Results Presentation SANLAM INTERIM RESULTS 2009

Sanlam UK

“Performance impacted by challenging environment”

Overall

Economic conditions impact volumes and AUM MI – satisfactory performance in difficult environment Continued execution of start-up business plans, despite strong headwinds

Key Challenges

Execution risk of ‘growth phase’ businesses in face of economic and regulatory pressures Continued investment aversion

Snapshot

1H09 %∆ Net Operating Profit ▼ R13m

• 65%

New business flows ▲ R955m +18%

• Life: Mainly SP

▼ R451m

• 44%
• Non-Life

▲ R504m n/a PVNB Premiums ▼ R463m

• 45%

VNB ▼ - n/a Margin ▼ - vs 0,36% Annualised ROGEV (14,3%) Annualised Adj ROGEV (8,7%)

• 2. Institutional Cluster (SI, SEB and SCM)

SI 12% SEB 11% SCM 1%

Growth (Optimise Capital)

Results Presentation 23 SANLAM INTERIM RESULTS 2009

Sanlam Investments (SI)

“Resilient performance, notwithstanding lower asset levels”

Overall

Lower average asset levels feeding into lower profits Businesses remain sound Improving investment performance

Key Challenges

Cost containment Sustained investment returns Client retention / net flows Focus on international expansion

Snapshot

1H09 %∆ Net Operating Profit ▼ R264m

• 8%

Gross business flows ▲ R25 408m +10%

• SA: Segregated

▲ R7 920m +24%

• SA: Other

▲ R15 580m +3%

• Non-SA

▲ R1 908m +28% Net flows ▲ R2 590m

• Institutional & retail

▲ R3 070m

• White label

▲ (R480m) FUM ▼ R403bn

• 1%

Annualised ROGEV 8,3% Annualised Adj ROGEV 18,7%

Focus on Investment Performance

0% 70% 100%

Percentage of SIM’s AUM exceeding benchmark - Jun 09 (R241bn)

60% 80% 90% 50% 40% Rolling 1 Yr Rolling 3 Yrs Rolling 5 Yrs 30% 20% 10%

30/06/08 31/12/08 30/06/09

24 Results Presentation SANLAM INTERIM RESULTS 2009

Sanlam Employee Benefits (SEB)

“Steady progress in challenging conditions”

Overall

Group Risk remains the SEB anchor Lower market values impacted SSS’s fee income Admin migration on track (97% of funds already off Wizard platform)

Key Challenges

Deteriorating claims experience Administration transition from “migration mode” to “business as usual mode” Low returns on participating annuity business

Snapshot

1H09 %∆ Net Operating Profit ▼ R65m

• 22%

New business flows ▼ R142m

• 47%
• SA: Recurring

▼ R76m

• 7%
• SA: Single

▼ R66m

• 65%

PVNB Premiums ▼ R704m

• 21%

VNB ▼ R5m

• 64%

Margin ▼ 0,71% vs 1,58% Annualised ROGEV 6,8% Annualised Adj ROGEV 11,3%

Sanlam Capital Markets (SCM)

“Return to profitability”

Overall

A pleasing return on capital of 28,4% Well positioned to benefit from market movements Allowance made for default risk in the credit business

Key Challenges

SCM remains susceptible to credit and market events – retains a prudent approach New deal flow limited in volatile markets – affects clients’ appetite

Snapshot

1H09 %∆ Net Operating Profit ▲ R59m +74% Total Revenue ▲ R162m +67% Cost to income ratio ▼ 62% vs 100% Capital R450m +13% Annualised ROGEV 28,4% Annualised Adj ROGEV 28,4%

Results Presentation 25 SANLAM INTERIM RESULTS 2009

Short-term 13%

Growth (Optimise Capital)

• 3. Short-term Insurance (Santam)

Santam

“Pressure on underwriting results”

Overall

Slow premium growth in line with industry Underwriting margins under pressure Significant increase in return on insurance funds Solvency at upper end of 35%-45% target range

Key Challenges

Improve risk management on corporate property business Profitability of motor book Portfolio management profitability Client retention

Snapshot

1H09 %∆ Net Operating Profit* ▼ R118m

• 37%

Gross written premium ▲ R7 291m +7% Net earned premiums ▲ R6 179m +9%

• Net claims ratio

▲ 72,9%

• Net acquisition ratio

▲ 25,6%

• Underwriting ratio

▼ 1,5% International solvency 42% Annualised ROGEV 22,1% Annualised Adj ROGEV 9,9%

*Sanlam’s share of profit less tax & minorities

26 Results Presentation SANLAM INTERIM RESULTS 2009

• 4. Capital Optimisation

Discretionary capital & Other 7%

Utilise

Discretionary Capital

Ongoing focus on efficient utilisation of capital in 2009 … Improve capital efficiency / optimisation: – Capital allocated to business units in a manner which will achieve

• ptimal ROGEV targets

Application of current discretionary capital of R2,8bn: – Value-adding strategic initiatives (maximise return on GEV) – Capital buffer remains prudent in prevailing market conditions, therefore buy back of Sanlam shares still on hold Timeframe: – Strategic projects assessed on an ongoing basis Further optimisation of capital remains a priority

Results Presentation 27 SANLAM INTERIM RESULTS 2009

Summary of 1H09 performance

Strategic diversification and the effect of prudent practices and assumptions shielded the Group in the severe economic downturn Life insurance businesses show their resilience: – Value of new business and margins broadly stable – Net life flows improve – Some deterioration in persistency, but still broadly in line with assumptions Lower asset base & increased volatility in investment business Confirmation of capital management approach – remains on track A sound platform and strategic base

STRATEGIC FOCUS FOR 2009 AND BEYOND

28 Results Presentation SANLAM INTERIM RESULTS 2009

Goal

Delivering sustainable growth

Specific Focus Areas

South Africa: Fully optimise and expand our diversified financial services presence: Improve operational efficiency and performance Optimise the capital structure Pursue selective add-on or diversification opportunities Transformation International: Africa / India : Position ourselves to have a leading position in the financial sector in these markets over time UK : A differentiated strategy / niche approach, aimed at providing specialist HNW financial services Operational efficiencies: Cost containment Harness further synergies between the Group’s existing businesses Distribution initiatives: Target 5% pa growth in SPF agency channel Strengthen relationships and positioning in Gauteng IFA market NEW distribution channel in India Capital efficiencies and application Stringent evaluation of capital investment opportunities – retain prudence Growth initiatives: Continued diversification of product set and markets Exploring potential of new countries (Nigeria, etc)

Results Presentation 29 SANLAM INTERIM RESULTS 2009

OUTLOOK

Outlook for Remainder of 2009

Business Environment : Uncertainty and volatility in global financial markets likely to continue, although there are some early signs of recovery / stability Tough economic climate reflecting in consumer demand will take some time to subside Regulatory change Challenges: Lower asset base Persistency Cost control Profitable growth opportunities

Group’s portfolio is adequately diversified to spread the risks & creates a sound platform from which to operate

30 Results Presentation SANLAM INTERIM RESULTS 2009

Notes

Group Financial Review 1 SANLAM INTERIM RESULTS 2009

Contents

Overview 2 Key features 2 Salient results 3 Executive review 4 Comments on the results 8 Interim financial statements 19 Accounting policies and basis of presentation 20 External audit reports 21 Shareholders’ information 23 – Group Equity Value 24 – Change in Group Equity Value 26 – Return on Group Equity Value 27 – Adjusted return on Group Equity Value 28 – Shareholders’ fund at fair value 30 – Shareholders’ fund income statement 34 – Notes to the shareholders’ fund information 38 – Embedded value of covered business 46 Group financial statements 55 – Statement of financial position 56 – Statement of comprehensive income 57 – Statement of changes in equity 58 – Cash flow statement 59 – Notes to the financial statements 60 Administration 62

Sanlam Group Interim Results

for the six months ended 30 June 2009

2 Group Financial Review SANLAM INTERIM RESULTS 2009

Key features

Earnings

Net result from financial services per share decreased by 4% Core earnings per share down 2% Normalised headline earnings per share up 34%

Business volumes

New business volumes up 1% to R51 billion Net value of new covered business down 3% to R243 million Net new covered business margin of 2,23%, up from 2,17% Net fund inflows of R7,7 billion, up 40%

Group Equity Value

Group Equity Value per share of R21,72 Annualised return on Group Equity Value per share of 5,2%

Capital management

Discretionary capital of R2,8 billion at 30 June 2009 Sanlam Life CAR cover of 2,5 times

3 Group Financial Review SANLAM INTERIM RESULTS 2009 2009 2008 ∆ Sanlam Group Earnings Net result from financial services per share cents 60,4 62,6

• 4%

Core earnings per share (1) cents 87,5 89,7

• 2%

Normalised headline earnings per share (2) cents 78,5 58,8 34% Diluted headline earnings per share cents 82,6 94,5

• 13%

Net result from financial services R million 1 234 1 334

• 7%

Core earnings (1) R million 1 789 1 913

• 6%

Normalised headline earnings (2) R million 1 605 1 254 28% Headline earnings R million 1 664 1 955

• 15%

Group administration cost ratio (3) % 26,8 28,0 Group operating margin (4) % 15,1 17,8 Business volumes New business volumes R million 51 485 50 985 1% Net fund flows R million 7 677 5 470 40% Net new covered business Value of new covered business R million 243 250

• 3%

Covered business PVNBP (5) R million 10 906 11 501

• 5%

New covered business margin (6) % 2,23 2,17 Group Equity Value Group Equity Value (7) R million 44 490 45 238

• 2%

Group Equity Value per share (7) cents 2 172 2 213

• 2%

Annualised return on Group Equity Value per share (7) (8) % 5,2 (1,7) Adjusted annualised return on Group Equity Value per share (7) % 12,2 12,4 Sanlam Life Insurance Limited Shareholders’ fund (7) R million 31 620 34 419 Capital adequacy requirements (CAR) (7) R million 8 200 8 075 CAR covered by prudential capital (7) times 2,5 2,7

dividends received from non-operating associates, but excluding fund transfers. Headline earnings include fund transfers.

Equity Value per share at the beginning of the period.

Salient Results

for the six months ended 30 June 2009

4 Group Financial Review SANLAM INTERIM RESULTS 2009 the Swix Index 21% lower. Average funds under management were commensurately significantly lower during the first half of 2009 compared to the same period in 2008, which impacted negatively on fund-based fee income of the Group.

Executive Review

The Sanlam Group has shown pleasing resilience in challenging markets to record a solid operational performance for the six months ended 30 June 2009. The strategic diversification into different market segments and solution offerings, as well as the effect of prudent practices and assumptions followed in the past, shielded the Group from the most severe impact of the economic downturn.

Business environment

The depressing financial and economic impact of the global financial market crisis continued unabated during the first half of 2009, although there were signs of some recovery in global equity markets towards the end of the reporting period. A lower demand for resources following the slowdown in the world’s largest economies had a negative impact on the wealth creation and growth achieved in the African commodity based economies in which the Group

• perates. The Group’s key exposure remains to the

performance of the South African economy, which, as no exception, followed the developed world into a recession. This is reflected in major pressure on consumers’ disposable income, in addition to the effects of the high interest rate and inflation conditions of the past two years. The result has been contracting consumer spending, in particular in the middle-income market. The interest rate cuts announced by the South African Reserve Bank over the past few months should provide some relief to consumers, but it is likely to take some time before this will be evident in increased consumer demand. The South African equity market recorded marginally positive returns for the six months ended 30 June 2009

• n the back of stronger international markets and

expectations that the worst of the financial market crisis may be over. Overall market levels, however, remain significantly lower than the comparative period in 2008 and continue to display high levels of volatility.

JSE Indices

The JSE All Share and Swix indices increased by 2,5% and 2,8% respectively during the first half of 2009, recovering only slightly from the dismal performance in the second half of 2008. The All Share Index remains 28% lower than the closing level at 30 June 2008, with

15 000 21 000 23 000 25 000 27 000 29 000 31 000 33 000 7 000 6 500 6 000 5 500 5 000 2 000 5.0%

• 22.9%

19 000 17 000 Jan 08 Dec 07 Feb 08 Mar 08 Apr 08 Jun-09 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 2 500 3 000 3 500 4 000 4 500 All Share Swix

• 1.9%
• 29.3%

2.8% 2.5%

Swix All Share

Performance review

In the context of the challenging environment, the Group achieved a pleasing operational performance for the first six months of the 2009 financial year. This has been aided by the diversified nature of the Group’s operations, in respect of market segmentation, solutions offering and geographical presence, which provided a platform for ongoing growth in new business volumes and a sound level of profitability. The pressure on the middle-income retail market in South Africa is however evident in declining new business volumes at Sanlam Personal Finance and Sanlam Private Investments, but this was offset by strong performances in the institutional and entry-level markets. Operating profit also reflects a varied performance, with a solid contribution from the retail life insurance and capital markets businesses, almost

• ffsetting the negative impact of the prevailing market

conditions on the reported earnings of the short-term insurance and investment management operations. Notwithstanding the pressure on earnings, the core

• perations of all the major Group businesses remain sound.

The primary performance target of the Group is to

• ptimise shareholder value through maximising the return
• n Group Equity Value (GEV). A target has been set for

the growth in GEV to exceed the Group’s cost of capital on a sustainable basis. Cost of capital is set at the government long bond yield plus 3%. The target is to exceed this return by at least 1%. The annualised return on GEV per share of 5% for the six months ended 30 June 2009 fell short of this target, but still represents a strong performance given the relatively weak investment markets

Group Financial Review 5 SANLAM INTERIM RESULTS 2009 and an increase of some 2% in long-term interest rates (and commensurately risk discount rates applied) during the period. The increase in risk discount rates in particular reduced the valuation and GEV earnings of the life insurance and wealth management operations. On a normalised basis, i.e. assuming a normalised investment market performance and excluding any once-off items, the annualised return of 12,2% for the six months exceeded the target of 11,3%. Total new business volumes, excluding the volatile and low margin white label business, grew by 3%, a particularly pleasing result in the current environment. Retail business sales declined by 8%, with Sanlam Personal Finance and Sanlam Private Investments reporting declines of 7% and 22% respectively. This was to an extent offset by strong growth of 8% achieved by Sanlam Developing Markets. Institutional business sales recorded a sterling performance, increasing by 27% on 2008. Most of the institutional business units contributed to this growth. The value of new covered business (after minorities) decreased by 3% from R250 million in the first half of 2008 to R243 million in 2009, reflecting the impact of lower new life business volumes in the middle-income market. The profitability of new covered business has been maintained through continued focus on cost management and the quality of new business written, with overall margins increasing from 2,17% in 2008 to 2,23% in 2009. Core earnings of R1 789 million are 6% lower than in 2008, the combined effect of a 7% decrease in the net result from financial services and a 4% decline in net investment income earned on the capital portfolio. The relatively lower base of assets under management impacted on the growth in fee income and the profitability

• f especially the investment management businesses. This

was further aggravated by a number of large commercial property claims at Santam. Core earnings per share decreased by only 2%, supported by the effect of the share buy-back programme during 2008, which resulted in a 4% reduction in the weighted average number of shares in issue compared to the first half of 2008. The investment return earned on the Group’s capital portfolio was marginally positive during the first six months

• f 2009, with positive local equity market return

somewhat offset by a reduction in the valuation of interest-bearing instruments and offshore investments. The investment return, however, improved significantly compared to the negative performance in the first half of

• 2008. Normalised headline earnings per share benefited

from the turnaround in investment return and increased by 34% on 2008. Diluted headline earnings per share, which include the International Financial Reporting Standards (IFRS) impact of Sanlam and Santam shares held by the policyholders’ fund, are 13% down on 2008.

Delivering on strategy

The Group’s focussed strategy continued to serve it well during the first six months of 2009, which was characterised by the prolonged impact of the most challenging environment faced by the Group in many

• years. The Board and management remain committed to

the Group’s key objective of maximising shareholder

• value. This is underpinned by the five pillars of optimal

capital utilisation, earnings growth, cost control and efficiencies, diversification and transformation. As indicated in the Group’s 2008 annual report, a more prudent approach is required in the application of discretionary capital in the current financial and economic

• environment. The focus has accordingly been on further
• ptimising the capital base of the Group, while only a few

selected investments have been made in existing

• perations and future growth markets. No share

buy-backs occurred during the first six months of 2009. A major portion of the Group’s capital is utilised by the covered business operations. Capital management and modelling within these operations receive continuous attention to achieve an optimal capital level, taking cognisance of the impact of changes in the capital management structure on expected return on GEV. This process indicated that shareholder value can be further enhanced by implementing a more conservative asset mix for the capital backing the covered business operations, thereby reducing the level of required capital. The Sanlam Board approved as a target a 10% reduction in the capital portfolio’s exposure to both equities and fixed-interest instruments and a consequential 20% increase in the cash exposure. This will result in less volatility in the capital base and released some R900 million of capital to the Group’s discretionary capital portfolio. The change in asset mix caused an increase in the cost of capital and consequently a once-off R313 million reduction in the value of in-force covered business (refer results commentary below). This negative impact will be more

Executive Review

continued

6 Group Financial Review SANLAM INTERIM RESULTS 2009 than offset through a value enhancing application of the additional discretionary capital. A total of R375 million was utilised for corporate activity during the period. The largest transactions concluded are as follows: Some R200 million was utilised to acquire minority shareholders’ interest in Channel Life, increasing the Group’s interest to just under 100%. This acquisition will enable the Group to further enhance synergies between the life businesses operating in the entry-level market segment in South Africa and to more effectively manage the capital requirements of the growth achieved in this market. MiWay required additional financing of R30 million to fund the start-up losses of this business. A further R17 million has been utilised since the end of June 2009 to acquire a proportionate share of the PSG Group’s interest in MiWay. The remainder of PSG’s interest was acquired by existing shareholders. Sanlam UK has been further capitalised by R30 million, which includes an increase in the Group’s interest in Principal from 86% to 89%. The Shriram Life Insurance acquisition agreement allowed for three performance payments based on the achievement of new business growth and expense

• targets. The third payment of R39 million became

due during the six months. The release of R900 million of capital from covered business, investment return and the application of capital for corporate activity contributed to a net increase in the level of discretionary capital in the Group to R2,8 billion at the end of June 2009. The Board remains committed to the utilisation of the discretionary capital in the most efficient manner, with a preference for new value- enhancing initiatives. The buy-back of Sanlam shares is not a priority but will be considered in periods of share price weakness. Despite pressure from the economic downturn, the Group continues with initiatives to enhance its growth platform. To this end, Sanlam Developing Markets is expanding its distribution reach across all territories, with the following important milestones reached during the six months: Advisor numbers in South Africa increased by 29% to 1 786, unprofitable business has been discontinued and the integration of the back office and administration functions of the South African businesses has been initiated; A new distribution channel has been launched by Shriram Life Insurance to cover the northern Indian territories, augmenting the focus to date on the south

• f India; and

Bancassurance joint venture arrangements have been strengthened in Africa. Sanlam Investments’ international expansion is also progressing according to plan. The establishment of the SMC wealth and investment management joint ventures will provide Sanlam Investments with a strong entry point into the fast growing Indian market. Sanlam International Investment Partners’ operational structure has been embedded and a number of international niche acquisition opportunities are being evaluated. Cost efficiency has been a strategic focus for the past five years, but received even more intensified focus in light of the financial market crisis and subsequent recessionary

• environment. The investment management operations

and Sanlam Personal Finance, which have been impacted most by lower assets under management and new business volumes respectively, made a concerted effort to reduce costs even further. Sanlam Investments reported a 9% reduction in expenditure, excluding the impact of a release of excess provisions. Sanlam Personal Finance initiated plans to reduce its cost base by some R100

• million. Containment of cost in all other business units is

also receiving appropriate attention, although not to the detriment of future growth opportunities. Efforts to increase the representation of previously disadvantaged individuals at middle and senior management level is a priority for the Group’s

• transformation. It remains a challenge given Sanlam’s

traditional low staff turnover, the freezing of vacancies in the current environment and a shortage of individuals with the required specialised financial services expertise. We will, however, continue to use all available

• pportunities to meet our targets in the years to come.

Looking ahead

International sentiment has improved over the last few months, with many analysts of the opinion that the world economy is at or past its lowest point of the current

Executive Review

continued

Group Financial Review 7 SANLAM INTERIM RESULTS 2009

• recession. Risk aversion has also started to subside with

a renewed interest from international investors in developing markets. This bodes well for the South African equity market, which has seen a major improvement in performance since the end of June. A continuation of positive equity market returns will support improved profitability in the Group’s investment management

• perations in particular and should be positive for fund

flows into equity-based solutions. Investment market volatility has, however, not fully subsided and downside risk remains high. The improved sentiment has also provided some support for commodity prices, which should underpin an improvement in the real economy of many of the African countries in which the Group operates. The negative trend in the South African economy is expected to stabilise and show gradual recovery on the back of higher commodity prices and improving consumer confidence and spending power as the benefits of the recent interest rate cuts start to emerge over the next few months. Any material impact

• f the improvement in economic conditions is however
• nly expected to reflect in the Group’s operating results

from 2010 onwards. Challenging trading conditions are therefore expected to persist for the remainder of the 2009 financial year, but we remain confident that our businesses are well set to continue weathering the challenges. Relative market movements during the second half of the year will impact

• n the level of earnings growth to be reported for the full

2009 financial year.

Executive Review

continued

Forward-looking statements

In this report we make certain statements that are not historical facts and relate to analyses and

• ther information based on forecasts of future results not yet determinable, relating, amongst
• thers, to new business volumes, investment returns (including exchange rate fluctuations) and

actuarial assumptions. These are forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties and, if one or more of these risks materialise, or should underlying assumptions prove incorrect, actual results may be very different from those anticipated. Forward-looking statements apply only as of the date on which they are made, and Sanlam does not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.

8 Group Financial Review SANLAM INTERIM RESULTS 2009

Group Equity Value at 30 June 2009

30 June 2009 31 December 2008

R million

Total Fair value

• f assets

Value of in-force Total Fair value

• f assets

Value of in-force Embedded value of covered business 27 773 14 502 13 271 28 591 15 013 13 578 Sanlam Personal Finance 18 939 8 032 10 907 19 574 8 275 11 299 Sanlam Developing Markets 3 040 1 215 1 825 2 796 1 032 1 764 Sanlam UK 685 238 447 680 234 446 Sanlam Employee Benefits 5 109 5 017 92 5 541 5 472 69 Other group operations 13 637 13 637 – 13 560 13 560 – Retail cluster 2 223 2 223 – 2 287 2 287 – Institutional cluster 5 778 5 778 – 6 000 6 000 – Short-term insurance 5 636 5 636 – 5 273 5 273 – Capital diversification (1 137) (1 137) – (1 429) (1 429) – Other capital and net worth adjustments 1 432 1 432 – 2 416 2 416 – 41 705 28 434 13 271 43 138 29 560 13 578 Discretionary capital 2 785 2 785 – 2 100 2 100 – Group Equity Value 44 490 31 219 13 271 45 238 31 660 13 578 Issued shares for value per share (million) 2 048,2 2 044,2 Group Equity Value per share (cents) 2 172 2 213 Share price (cents) 1 728 1 700 Discount

• 20%
• 23%

The GEV as at 30 June 2009 amounted to R44,5 billion, down 2% on the R45,2 billion at the end of 2008. On a per share basis GEV decreased by 2% from 2 213 cents to 2 172 cents at 30 June 2009, including the effect of the 98 cents per share dividend paid during 2009. The Sanlam share price traded at a 20% discount to GEV by close of trading on 30 June 2009.

Comments on the Results

Group Equity Value (GEV)

GEV is the aggregate of the following components: The embedded value of covered business, being the life insurance businesses of the Group, which comprises the required capital supporting these operations and the net present value of their in-force books of business (VIF); The fair value of other Group operations based on longer term assumptions, which includes the investment management, capital markets, credit, short-term insurance and the non-covered wealth management operations of the Group; and The fair value of discretionary and other capital. GEV provides an indication of the value of the Group’s operations, but without placing any value on future new covered business to be written by the Group’s life insurance businesses. Sustainable return on GEV is the primary performance benchmark used by the Group in evaluating the success of its strategy to maximise shareholder value.

Introduction

The Sanlam Group results for the six months ended 30 June 2009 are presented based on and in compliance with International Financial Reporting Standards (IFRS), as applicable.

Group Financial Review 9 SANLAM INTERIM RESULTS 2009 As a financial services organisation, the Group has a major exposure to financial markets in that the shareholder capital portfolio is invested in financial instruments, a portion of the fee income base is linked to the level of assets under management, while the valuation of the in force book of covered business is impacted by changes in long-term interest rates and investment return

• assumptions. In addition to the subdued investment market performance in the first half of 2009, an increase of some 2% in

long-term interest rates required a commensurate increase in the risk-adjusted discount rate used for the valuation of the Group’s covered and wealth management businesses. Given these conditions, the annualised return on GEV (ROGEV) per share of 5% for the first six months of 2009 is an overall satisfactory performance. This is testimony to the defensive qualities of the Group’s diversified portfolio of businesses. The return on the Group’s international operations was negatively impacted by a stronger rand and the impact on the Sanlam UK operations of the recession in the United Kingdom. This was, however, compensated for by a satisfactory return achieved on the other Group operations.

Return on Group Equity Value for the six months ended 30 June 2009

June 2009 June 2008 Earnings R million Return* % Earnings R million Return* % Covered business 770 5,5 998 7,1 Sanlam Personal Finance 446 4,6 490 4,9 Sanlam Developing Markets 86 6,2 180 17,4 Sanlam UK 4 1,2 139 32,5 Sanlam Employee Benefits 234 8,6 189 7,3 Other operations 790 12,0 (1 692)

• 20,7

Sanlam Personal Finance 133 19,6 13 2,2 Sanlam Developing Markets 2 24,9 (7)

• 43,8

Sanlam UK (117)

• 25,7

25 8,5 Institutional cluster 241 8,1 (301)

• 8,1

Short-term insurance 531 21,2 (1 422)

• 39,6

Discretionary and other capital (475) 119 Balance of portfolio (180) 240 Shares delivered to Sanlam Demutualisation Trust – (26) Shriram goodwill less value of in-force acquired (39) (43) Treasury shares and other (128) (130) Change in net worth adjustments (128) 78 Return on Group Equity Value 1 085 4,9 (575)

• 2,2

Return on Group Equity Value per share 5,2 0,0

* Annualised

Covered business achieved a return of 6% compared to 7% in the first half of 2008. This lower level of return is mainly attributable to an increase in the cost associated with the capital required to back these operations. As indicated above, the Sanlam Board approved a more conservative asset mix for the required capital, which reduced the overall capital to be held in respect of covered business by R900 million. A consequence of the more conservative asset mix is a reduction in the expected investment return to be earned on the required capital in future. This increased the opportunity cost of holding the capital, referred to as the cost of capital, by R313 million. Excluding this once-off net increase in the cost of capital, the annualised return on covered business amounted to 8%. The return on covered business includes positive operating experience variances of R289 million, of which the majority relates to underwriting experience that was better than the assumptions used in the actuarial basis. The focus on quality of business written also contributed to positive persistency experience, a particularly satisfactory result given the overall negative market experience. This was offset by negative economic assumption changes following the increase in risk discount rates.

Comments on the Results

continued

10 Group Financial Review SANLAM INTERIM RESULTS 2009 The other Group operations yielded an overall annualised return of 12%, compared to a negative return of 21% for the comparable period in 2008. Sanlam Personal Finance and Santam delivered a marked improvement on their 2008 performances. This was however offset by negative earnings of R117 million recorded by Sanlam UK. Most of Sanlam Personal Finance’s other operations had a strong first six months of 2009, with future earnings prospects remaining positive. This supported the valuations, despite the 2% increase in the risk discount rate during the period. The return was also positively impacted by the release of some R40 million

• f capital from Glacier. The investment in Santam also performed well, with the Santam share price increasing by 7% after allowing

for the payment of its final dividend. The Sanlam UK businesses are experiencing the aftermath of the financial market crisis more severely than the South African based operations. The level of assets under management and profitability of Principal and Buckles were in particular negatively impacted by the UK economic and financial market conditions. Under these conditions, a prudent approach was followed in valuing these businesses, which required a further write-down of R77 million in their carrying values. The stronger rand against the pound also aggravated the negative earnings. The valuation of the businesses in the Institutional cluster remained on an overall basis broadly in line with the end of 2008, with the GEV earnings for the first six months to 30 June 2009 comprising mostly of the net operating profit earned during the period. The return on discretionary and other capital was impacted by the following: Negative investment return of R180 million on the balance of the capital portfolio. This can mostly be ascribed to negative return on the offshore exposure in the portfolio due to the strengthening of the rand exchange rate, marked-to-market losses

• n the interest-bearing instruments held, in line with the All Bond return, as well as negative investment return on the

discretionary capital invested in the Botswana equity markets; The write-off for GEV purposes of the R39 million goodwill recognised in respect of the last remaining performance payment to Shriram in terms of the acquisition agreement of Shriram Life Insurance in India; A negative change of R128 million in the net worth adjustments. This is largely due to an increase in the allowance for corporate costs in line with the expected inflationary increase in the annual corporate expenses; and A loss of R128 million recognised in respect of treasury shares. This loss is substantially attributable to losses recognised on the delivery of share incentive scheme shares to participants at the applicable strike prices.

Earnings Summarised shareholders’ fund income statement for the six months ended 30 June 2009

R million

2009 2008

∆

Net result from financial services 1 234 1 334

• 7%

Net investment income 555 579

• 4%

Core earnings 1 789 1 913

• 6%

Project expenses (15) (40) 63% Net equity-accounted headline earnings 10 (4) >100% BEE transaction costs (3) (3) – Net investment surpluses 23 (447) >100% Secondary Tax on Companies (STC) (162) (99)

• 64%

Discontinued operations – (35) – Amortisation of value of business acquired (37) (31)

• 19%

Normalised headline earnings 1 605 1 254 28% Other non-headline earnings and impairments (58) (103) 44% Normalised attributable earnings 1 547 1 151 34%

Comments on the Results

continued

Group Financial Review 11 SANLAM INTERIM RESULTS 2009 Core earnings for the six months of R1 789 million are 6% down on 2008, the combined effect of a 7% reduction in the net result from financial services for the period and a 4% decline in net investment income. On a per share basis, core earnings decreased by 2%, reflecting the impact of the 4% reduction in the weighted average number of shares in issue due to the share buy-backs during 2008. The net result from financial services of R1 234 million for the first six months of 2009 is 7% lower than in 2008. As indicated before, the following items have an impact on this result: In terms of IFRS only variable costs incurred in writing new investment management policy contracts can be capitalised and expensed over the lifetime of the contract in line with fees earned. All fixed acquisition costs must be expensed at inception

• f investment management policies. Similarly, the Group’s actuarial valuation basis for most insurance contracts does not

allow for the capitalisation of certain upfront acquisition costs, which commensurately results in accounting losses at inception of these contracts. These losses, referred to as new business strain, have a particularly pronounced impact on earnings in strong new business growth scenarios (as reported by Sanlam Developing Markets), as well as in instances of a change in business mix (as experienced by Sanlam Personal Finance) in the first half of 2009. The impact of MiWay only becoming operational during February 2008. On a comparable basis the net result from financial services increased by 1% on 2008, a very pleasing result in the current environment.

Net result from financial services for the six months ended 30 June 2009

R million

2009 2008

∆

Net result from financial services on comparable basis 1 872 1 848 1% Retail cluster 1 364 1 265 8% Institutional cluster 415 423

• 2%

Santam 118 188

• 37%

Corporate and other (25) (28) 11% MiWay (launched in February 2008) (36) (23)

• 57%

New business strain (602) (491)

• 23%

Net result from financial services 1 234 1 334

• 7%

Comments on the Results

continued

Core earnings

Core earnings comprise the net result from financial services (operating profit) and net investment income earned on the shareholders’ fund, but exclude abnormal and non-recurring items as well as investment surpluses. Net investment income includes dividends received from non-operating associated companies and joint ventures, but excludes the equity- accounted retained earnings.

12 Group Financial Review SANLAM INTERIM RESULTS 2009 The table below provides an analysis of the net result from financial services per individual business.

Net result from financial services for the six months ended 30 June 2009

R million

2009 2008

∆

Retail cluster 789 793

• 1%

Sanlam Personal Finance 691 678 2% Sanlam Developing Markets 85 78 9% Sanlam UK 13 37

• 65%

Institutional cluster 388 404

• 4%

Sanlam Investments 264 287

• 8%

Sanlam Employee Benefits 65 83

• 22%

Sanlam Capital Markets 59 34 74% Short-term insurance cluster 82 165

• 50%

Santam 118 188

• 37%

MiWay (36) (23)

• 57%

Corporate and other (25) (28) 11% Net result from financial services 1 234 1 334

• 7%

Sanlam Personal Finance’s net result from financial services for the six months of R691 million is 2% up on 2008. Before tax and minority interests, the gross result from financial services is marginally down on 2008. Risk underwriting profit increased by 28% to R248 million, underpinned by an improved underwriting experience. The relatively lower level of assets under management during the first half of 2009 reduced fund-based fee income, with a commensurate negative impact on administration fee income. Containment of costs, however, assisted in limiting the decline in overall administration profit to 11%. Market related profit of R514 million is also 7% lower than 2008, largely attributable to lower interest earned on working capital and a lower release of profit from the asset mismatch provision. The balance of the asset mismatch provision was some R500 million lower at the end of 2008 compared to 2007, resulting in a relatively lower base from which profit is released. The Sanlam Developing Markets net result from financial services of R85 million is 9% up on 2008 (up 13% before tax and minority shareholders’ interest). – The South African operations more than doubled their contribution to the gross result from financial services. Sanlam Sky Solutions reported an increase in earnings, but the main contributor to the growth was Channel Life, whose 2008 earnings were impacted by expenses relating to the closure of its call centre. – Botswana Life managed to increase its gross result from financial services by 8%, with positive mortality experience on the annuity book and a reduction in the credit default provision being partially offset by the negative impacts of the weak equity markets and some mismatch losses in the annuity portfolio. – The rest of Africa operations reported lower earnings on an overall basis. Most territories experienced lower new business volumes in the current economic environment, which resulted in an under recovery of fixed costs. Also contributing to the lower earnings are additional bad debt provisions, a strengthening of persistency bases, as well as lower credit life business following a general reduction in lending activities of banks in the current environment. As indicated before, the retail market in the United Kingdom (UK) has been more severely impacted by the financial crisis than South Africa. Despite some recent improvement in sentiment and economic statistics, the first six months of 2009 has been characterised by continued economic uncertainty, rising unemployment, poor consumer confidence and depressed financial and housing markets. This had a particularly negative impact on the Punter Southall Group, Principal and Buckles, whose results are directly affected by investment market performance and business volumes. Both these indicators underperformed in the first half of the 2009 financial year, impacting negatively on the earnings reported by these

• perations. Merchant Investors provided some resilience and reported an improved performance. The growth in rand-based

Comments on the Results

continued

Group Financial Review 13 SANLAM INTERIM RESULTS 2009 earnings was further negatively impacted by an average 9% strengthening of the rand against the British pound, which contributed to an overall 65% decline in Sanlam UK’s net result from financial services. The Institutional cluster operations were in particular affected by a lower average level of assets under management, following the under performance in investment markets since June 2008. – Sanlam Investments’ net result from financial services of R264 million is down 8% on the comparable period in 2008 (down 12% to R370 million before tax and minorities). Excluding the impact of a release of over provisions of some R40 million (after tax), the net result from financial services decreased by 22%, which is mainly attributable to a decline in the average level of assets under management in 2009 compared to the same period in 2008, as well as a R14 million decrease in performance fees earned. A positive development has been that both SIM Global and Octane have reached the high water mark for a number of their portfolios and have started earning performance fees again. Costs were also well managed and are 9% lower than 2008, excluding the positive impact of the release of provisions. – Sanlam Employee Benefits’ net result from financial services decreased by 22% from R83 million in 2008 to R65 million for the first half of 2009. Good growth in risk underwriting profit was more than offset by an under recovery of fixed cost at Sanlam Structured Solutions, following low new business volumes and a reduction in interest earned on working capital. – Sanlam Capital Markets made a welcome return to profitability and recorded a gross result from financial services of R61 million compared to a breakeven position in the first half of 2008. After taxation, the net result from financial services increased by 74% from R34 million in 2008 to R59 million. The equities division had a very strong six months, driven by equity-backed finance transactions. The debt division also recorded satisfactory results, despite continued pressure from credit valuations. Deal flow at the market activity division, however, remained subdued, which contributed to an under

• performance by this division. Capital allocated to Sanlam Capital Markets was increased by R50 million during the period,

translating into a return of 26% on the R450 million capital base, a very satis-factory result in the prevailing conditions. The underwriting results of the short-term insurance cluster were hard hit by a number of large fire-related corporate claims, in line with a general increase in these claims across the industry. This contributed to a 50% decline in the cluster’s net result from financial services. Santam still managed to achieve an underwriting margin of 1,5%, a satisfactory result compared to the industry average. Income earned on Santam’s float was significantly higher as a result of a higher level of float. Corporate administration expenses are 11% lower than 2008, the combined effect of timing differences in the recognition of expenses and focussed cost management. Net investment income declined by 4%. This is mainly attributable to a lower absolute level of capital following the utilisation of discretionary capital for share buy-backs and corporate activity during 2008 and 2009.

Normalised headline earnings

Normalised headline earnings of R1 605 million are 28% higher than the comparable period in 2008. The increase in normalised headline earnings is in the main attributable to the following: A reduction of 6% in core earnings as discussed above. Investment markets performed relatively better in the first six months of 2009 than the comparable period in 2008 (refer discussion of business environment above). The performance of the capital portfolio compared to mandate also improved. This resulted in a turnaround of the negative investment surpluses of R447 million recorded in 2008 to a net positive return

• f R23 million in 2009.

The 64% increase in the secondary tax on companies (STC) charge is mainly attributable to the utilisation of available STC credits for the dividend paid in May 2009. STC credits generated in the first half of 2009 are lower than in 2008 due to the utilisation

• f discretionary capital during 2008 and 2009 for share buy-backs and other corporate activity (thereby reducing the absolute

level of capital on which investment income is earned), as well as a decrease in the capital portfolio’s exposure to equities.

Comments on the Results

continued

14 Group Financial Review SANLAM INTERIM RESULTS 2009

Business volumes New business flows

New business volumes, excluding white label, increased by 3% on the first six months of 2008.

New business volumes for the six months ended 30 June 2009

R million

2009 2008

∆

Sanlam Personal Finance 14 700 15 824

• 7%

South Africa 10 214 11 559

• 12%

Africa 4 486 4 265 5% Sanlam Developing Markets 1 316 1 214 8% South Africa 635 665

• 5%

Africa 605 449 35% Other international 76 100

• 24%

Sanlam UK 955 807 18% Institutional cluster 25 550 23 305 10% Sanlam Investments 25 408 23 035 10% Sanlam Employee Benefits 142 270

• 47%

Santam 6 179 6 085 2% New business excluding white label 48 700 47 235 3% White label 2 785 3 750

• 26%

Total new business 51 485 50 985 1% Sanlam Personal Finance new business sales slowed down as the challenging economic and business environment impacted

• n Topaz middle market sales in particular. The Topaz market is more sensitive to the current economic environment and

investment market volatility. The combined life and non-life sales are 7% lower than the comparable period in 2008. Total South African new business volumes decreased by 12% compared to 2008. – Recurring premium life sales are 10% lower than the same period in 2008. The high interest rate and inflation environment of 2007 and 2008 continues to negatively impact disposable income, with a commensurate negative impact on recurring premium savings and retirement solutions. Recurring risk business is less sensitive to these conditions and are 7% higher than 2008. – Single premium life sales are down 13% on 2008. The market conditions are now also impacting on Glacier’s volumes, which are 8% lower than the comparable period in 2008. Part of the lower demand can be attributed to clients’ preference to reduce their personal debt, but alternative investment classes, for example property, has also become more attractive as an investment choice after decreasing valuations over the past two years. Single premium sales of Topaz life solutions decreased by 17% on 2008. Guaranteed plans performed strongly in 2008, but demand slowed down in the first six months of 2009 as the recent interest rate cuts reduced the attractiveness of guaranteed rates. – Investment business is also struggling with lower demand for Glacier investment solutions. The same drivers affecting Glacier life sales are also impacting on the investment solution sales. This contributed to a 10% reduction in new investment business volumes. The Namibian operations recorded a 5% increase in volumes, which is attributable to demand for both life insurance solutions and unit trusts. The same factors impacting on the South African operations are also affecting Namibia. Sanlam Developing Markets inflows are 8% higher than 2008. Excluding the discontinued South African single premium business, new business volumes grew by 17% – a commendable result.

Comments on the Results

continued

Group Financial Review 15 SANLAM INTERIM RESULTS 2009 South African inflows are 5% lower than the comparable period in 2008, but this includes the impact of discontinued single premium business. Single premiums recorded comprise of continuations of existing business reaching maturity date and are expected to decline over time as the in-force book winds down. The core recurring premiums business is up 5% on 2008. Sanlam Sky Solutions increased its new recurring premium sales by 8%, with a strong underlying performance masked by an intentional decision to scale back on low margin broker direct business. This decision has resulted in a marked improvement in the quality and profitability (as measured by the value of new business margin) of business written. Channel Life individual life sales underperformed during the first six months of 2009, offsetting an otherwise healthy growth contribution from Safrican and group benefits business. African inflows are 35% up on 2008, supported by a sterling performance from Botswana, the largest African operation. Recurring premiums increased by 30%, with single premiums exceeding 2008 by 37%. Both individual life and annuity sales performed strongly in Botswana with bancassurance volumes also well up on the comparable period in 2008. A weaker rand exchange rate also had a positive impact on the rand-based growth recorded by Botswana Life. Apart from Ghana, the

• ther African operations are in general struggling to record growth on the prior year, being affected by the economic

downturn caused by low commodity prices and the closure of mines. Shriram’s new business volumes of R76 million is 24% lower than 2008, in part due to a marked switch from single to recurring business. The latter increased by 57% on 2008. Single premiums are well down as the Indian market did not escape the impact of the tougher economic environment. The outlook for the rest of the year has improved, with the new distribution channel expected to start contributing to new business volumes. Sanlam UK started to experience a slowdown in new business volumes towards the end of 2008 as the UK economy continued to deteriorate. This trend continued into the first six months of 2009, with new life business volumes decreasing by 44% on the first half of 2008. Principal contributed new business of R504 million for the six months. The combined life and investment new business volumes are 18% up on 2008. New business volumes are only expected to improve in 2010, as the UK economy emerges from its deepest recession in years. The Institutional cluster recorded an overall 10% increase in new business volumes. Retail business volumes are reflecting a similar result to Sanlam Personal Finance, as the client bases are affected similarly by the pressure on consumer spending power and risk aversion caused by market volatility. In contrast, institutional business flows were particularly strong. Sanlam Investments new business volumes increased by 10% compared to 2008. – The South African businesses performed strongly in the current environment, exceeding the 2008 new business sales by 9%. The biggest contributor is RSA segregated business, recording growth of 24%. Segregated business include an increase of R2,7 billion in the mandate awarded by the Public Investment Corporation (PIC). The pressure on the retail middle market is reflected in the new retail business recorded by Sanlam Collective Investments, which is 10% down on

• 2008. This was however offset by strong wholesale business inflows, which contributed to an overall 16% increase in

Sanlam Collective Investments’ new business sales compared to 2008. Sanlam Private Investments is also experiencing the effect of the pressures on the retail market, with its volumes decreasing by 22% on the high base in 2008. – New inflows in the Rest of Africa increased by 35%, with especially segregated business performing exceptionally well. – International (non-Africa) investment business flows are 23% lower than the first six months of 2008. The volatile international investment markets continued to impact on Octane and SIM Global, with both businesses lagging the comparable period. Recent outperformance of investment mandates, combined with a reduction in investor risk aversion, should be positive for future net inflows into these businesses. Sanlam Employee Benefits’ new business volumes are 47% lower than the comparable 2008 inflows, an overall disappointing

• result. This is largely attributable to lower single premium volumes (65% lower than 2008), with new recurring premiums

decreasing by 7%. The competitiveness of Sanlam Employee Benefits’ pricing is being investigated as part of the process to regain market share. The Group however continues to be driven by profitability and not by pure market share.

Comments on the Results

continued

16 Group Financial Review SANLAM INTERIM RESULTS 2009

Comments on the Results

continued

Santam recorded a 2% increase in net premium inflows over the first six months of 2009. Net written premiums of continued

• perations increased by 7%, a very satisfactory result in the difficult industry conditions. The relatively low level of growth is in

part attributable to reinsurance reinstatement premiums paid following the large corporate claims.

Net fund flows

The Group has been very successful in retaining funds under management and achieved net inflows (excluding white label business) for the six months of R8,2 billion, 12% up on the R7,3 billion in the corresponding period in 2008. Excluding a low margin outflow at Sanlam Private Investments (refer below), net fund inflows increased by 74% to R12,7 billion, a particularly satisfactory result in the current environment. Total inflows increased by 2% to R59,4 billion while outflows in respect of fund withdrawals and policy benefits of R51,7 billion were down by 2%.

Net fund flows for the six months ended 30 June 2009

R million

2009 2008 Sanlam Personal Finance 3 411 2 221 Life business 929 861 Investment business 2 482 1 360 Sanlam Developing Markets 610 673 Sanlam UK (111) 91 Institutional cluster 2 571 2 538 Sanlam Employee Benefits (499) (517) Sanlam Investments 3 070 3 055 Santam 1 676 1 768 Net fund flows excluding white label 8 157 7 291 White label (480) (1 821) Total net fund flows 7 677 5 470 The main contributors to the increase in net inflows are Sanlam Personal Finance and Sanlam Investment Management. Net inflows of investment business at Sanlam Personal Finance were supported by good retention of Namibian unit trusts. Despite lower life new business volumes, Sanlam Personal Finance managed to increase its net inflow of life business. This is the combined result of improved retention as well as lower equity markets reducing the value of benefit payments. The persistency levels of life business during the six months, measured in terms of the aggregate of lapses, surrenders and paid-ups, deteriorated only marginally relative to that of the first six months in 2008. Sanlam Investments’ net inflows of R3,1 billion include a withdrawal of low margin custody business of R4,5 billion at Sanlam Private Investments, which will have a negligible impact on earnings. Excluding this flow, Sanlam Investments increased its net inflows by R4,5 billion, of which R2,7 billion is attributable to the new PIC mandate.

Value of new covered business

Despite an overall 7% decline in new life insurance business volumes, the Group retained the profitability of new business. The total value of new life business (VNB) of R276 million is 5% lower than that reported in 2008. Net of minority interests VNB decreased by 3% to R243 million. The overall average new life business margin (after minorities) increased from 2,17% to 2,23%.

Group Financial Review 17 SANLAM INTERIM RESULTS 2009

Value of new covered business for the six months ended 30 June 2009

R million

2009 2008

∆

Value of new covered business 276 290

• 5%

Sanlam Personal Finance 135 160

• 16%

Sanlam Developing Markets 136 113 20% Sanlam UK – 3

• 100%

Sanlam Employee Benefits 5 14

• 64%

Net of minorities 243 250

• 3%

Present value of new business premiums 11 469 12 141

• 6%

Sanlam Personal Finance 7 488 8 089

• 7%

Sanlam Developing Markets 2 814 2 330 21% Sanlam UK 463 836

• 45%

Sanlam Employee Benefits 704 886

• 21%

Net of minorities 10 906 11 501

• 5%

New covered business margin 2,41% 2,39% Sanlam Personal Finance 1,80% 1,98% Sanlam Developing Markets 4,83% 4,85% Sanlam UK – 0,36% Sanlam Employee Benefits 0,71% 1,58% Net of minorities 2,23% 2,17% Sanlam Personal Finance’s VNB decreased by 16% to R135 million. This is attributable to the lower new business volumes, partially compensated for by the change in business mix towards risk underwriting and a strong focus on containment of costs. The average VNB margin declined from 1,98% in 2008 to 1,80%, which still represents a satisfactory performance. The Sanlam Developing Markets operations reported a commendable 20% increase in gross VNB to R136 million, continuing its growth trend. The average VNB margin decreased marginally from 4,85% to 4,83%. The South African operations’ margins improved, principally due to the intentional change in business mix away from the low margin broker direct business. Botswana Life’s VNB margin decreased slightly compared to the first six months of 2008, the result of a strengthening of the persistency basis and a reduction in annuity margins following a decline in interest rates. The VNB and margins of the other African

• perations were negatively impacted by lower sales volumes and a general strengthening of the persistency bases.

Both Sanlam UK and Sanlam Employee Benefits reported a significant reduction in VNB in line with their new business performance.

Solvency

All of the life insurance businesses within the Group were sufficiently capitalised at the end of June 2009. The total capital of Sanlam Life Insurance Limited, the holding company of the Group’s major life insurance subsidiaries, amounted to R31,6 billion

• n 30 June 2009. Its admissible regulatory capital at the end of June 2009 amounted to R20,7 billion, which covered its

regulatory Capital Adequacy Requirements (CAR) 2,5 times, compared to 2,7 times on 31 December 2008. No policyholder portfolio held a negative bonus stabilisation reserve in excess of 7,5% of policyholder liabilities at the end of June 2009. Santam’s capital (shareholders’ funds including bonds) constituted 42% of net earned premiums on 30 June 2009, which is at the higher end of the target range of 35% to 45% set by Santam.

Comments on the Results

continued

18 Group Financial Review SANLAM INTERIM RESULTS 2009 FitchRatings has affirmed the following ratings of the Group in 2009: Sanlam Limited: National Long-term: AA-(zaf) Sanlam Life Insurance Limited: National Insurer Financial Strength: AA+(zaf) National Long-term: AA(zaf) National Short-term: F1+(zaf) Subordinated debt: AA-(zaf) Santam Limited: National Insurer Financial Strength: AA+(zaf) National Long-term: AA(zaf)

Dividend

No interim dividend has been declared. It is Sanlam’s practice to pay only an annual dividend, given the cost associated with the distribution of a dividend to our large shareholder base. Roy Andersen Johan van Zyl Chairman Group Chief Executive Sanlam Limited Cape Town 2 September 2009

Comments on the Results

continued

19 Group Financial Review SANLAM INTERIM RESULTS 2009

SANLAM GROUP INTERIM FINANCIAL STATEMENTS

for the six months ended 30 June 2009

20 Group Financial Review SANLAM INTERIM RESULTS 2009 The accounting policies adopted for purposes of the financial statements comply with International Financial Reporting Standards (IFRS), specifically IAS 34 on interim financial reporting, and with applicable legislation. The condensed financial statements are presented in terms of IAS 34, with additional disclosure where applicable, using accounting policies consistent with those applied in the 2008 financial statements, apart from the changes resulting from new and revised standards (refer below). The policy liabilities and profit entitlement rules are determined in accordance with prevailing legislation, generally accepted actuarial practice and the stipulations contained in the demutualisation proposal. There have been no material changes in the financial soundness valuation basis since 31 December 2008, apart from changes in the economic assumptions. The basis of preparation and presentation of the shareholders’ information is also consistent with that applied in the 2008 financial statements.

Application of new and revised IFRSs and interpretations

The following new or revised IFRSs and interpretations are applied in the Group’s 2009 financial year: IAS 1 Revised Presentation of Financial Statements IAS 1 Amended Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation IAS 32 Amended Financial Instruments: Presentation – Puttable Financial Instruments and Obligations Arising on Liquidation IFRS 2 Amended Share-based Payment – Vesting Conditions and Cancellations May 2008 Improvements to IFRS Amendments to IFRIC 9 – Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: Recognition and Measurement – Embedded Derivatives Amendment to IFRS 7 Financial Instruments: Disclosure – Improving Disclosures about Financial Instruments AC 503: Amendment to AC 503 – Accounting for Black Economic Empowerment (BEE) Transactions The application of these standards and interpretations did not have a significant impact on the Group’s reported results and cash flows for the six months ended 30 June 2009 and the financial position at 30 June 2009. The following presentational changes were introduced upon adoption of the revised IAS 1: The Group income statement has been replaced with a Group statement of comprehensive income, presenting all items of recognised income and expense in one statement; The Group statement of changes in equity only includes details of transactions with owners – non-

• wner changes in equity are presented in a single

line; and The Group balance sheet has been renamed to a Group statement of financial position. The following new or revised IFRSs and interpretations have effective dates applicable to future financial years and have not been early adopted: IAS 27 Amended Consolidated and Separate Financial Statements (effective 1 July 2009) IAS 39 Amended Financial Instruments: Recognition and Measurement – Eligible Hedged Items (effective 1 July 2009) IFRS 3 Revised Business Combinations (effective 1 July 2009) IFRS 5 Amended Non-current Assets Held for Sale and Discontinued Operations (effective 1 July 2009) IFRIC 17 Distribution of Non-cash Assets to Owners (effective 1 July 2009) April 2009 Improvements to IFRS (mostly effective 1 January 2010) Amendments to IFRS 2: Group Cash-settled Share-based Payment Transactions (effective 1 January 2010) AC 504: IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction in a South African Pension Fund Environment (effective 1 April 2009) The application of these revised standards and interpretations in future financial reporting periods is not expected to have a significant impact on the Group’s reported results, financial position and cash flows, except for IFRS 3 Revised and IAS 27 Amended for which the impact cannot be quantified as it will depend on the nature and structure of a specific business combination.

Accounting policies and basis of presentation

Group Financial Review 21 SANLAM INTERIM RESULTS 2009

Report on review of interim condensed financial statements

To the directors of Sanlam Limited Introduction We have reviewed the accompanying consolidated condensed statement of financial position of Sanlam Limited as of 30 June 2009 and the related statements of comprehensive income, changes in equity and cash flow for the six-month period then ended and other explanatory notes set out on pages 20 and 56 to 61. Directors’ responsibility The Group’s directors are responsible for the preparation and fair presentation of these interim condensed financial statements in accordance with International Financial Reporting Standard IAS 34 – “Interim Financial Reporting”. Auditor’s responsibility Our responsibility is to express a conclusion on these interim condensed financial statements based on our review. Scope of review We conducted our review in accordance with International Standard of Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor

• f the Entity”. A review of interim financial information

consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an

• audit. Accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial statements of Sanlam Limited were not prepared, in all material respects, in accordance with International Financial Reporting Standard IAS 34, “Interim Financial Reporting”. Ernst & Young Inc. Director: MP Rapson Registered Auditor Cape Town 2 September 2009

Limited assurance report of the independent auditors on the Sanlam Limited financial information for the Shareholders’ Fund

To the directors of Sanlam Limited Introduction We have carried out a limited assurance engagement on the Sanlam Limited financial information for the Shareholders’ Fund (Sanlam Limited Shareholders’ Information) for the six months ended 30 June 2009 on pages 24 to 54, which has been prepared in accordance with the basis of preparation and presentation set out on page 20. This report should be read in conjunction with the reviewed interim condensed financial statements where the policy liabilities are calculated on the financial soundness valuation basis. Respective responsibilities of directors and independent auditors The directors are responsible for the interim Group financial statements, and the Sanlam Limited Shareholders’ Information. Our responsibilities in relation to the interim Group financial statements are to review the interim financial information as set out on page 21. Our responsibilities, as independent assurance providers, in relation to the Sanlam Limited Shareholders’ Information are to express a limited assurance conclusion to the board of directors to confirm that nothing has come to our attention during our limited assurance engagement that causes us to believe that the Sanlam Limited Shareholders’ Information at 30 June 2009 was not prepared in accordance with the basis of preparation and presentation set out on page 20. Scope of engagement We conducted our limited assurance engagement in accordance with the International Standards on Assurance Engagements: ISAE 3000, “Assurance Engagements other than Audits or Reviews of Historical Financial Information”. A limited assurance engagement consists of making inquiries, primarily of persons responsible for financial, accounting and actuarial matters, and applying analytical and other review

• procedures. A limited assurance engagement is

substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that

External Audit Reports

22 Group Financial Review SANLAM INTERIM RESULTS 2009 we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Limited assurance conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying Shareholders’ Information at 30 June 2009 has not been properly prepared, in all material respects, in accordance with the basis of preparation and presentation set out on page 20. Ernst & Young Inc. Director: MP Rapson Registered Auditor Cape Town 2 September 2009

External Audit Reports

continued

Group Financial Review 23 SANLAM INTERIM RESULTS 2009

Contents

Group Equity Value 24 Change in Group Equity Value 26 Return on Group Equity Value 27 Adjusted return on Group Equity Value 28 Shareholders’ fund at fair value 30 Shareholders’ fund income statement 34 Notes to the shareholders’ fund information 38 Embedded value of covered business 46

Shareholders’ Information

for the six months ended 30 June 2009

24 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Group Equity Value

at 30 June 2009

June Reviewed 2009

R million

Note Total Fair value of assets Value of in-force Sanlam Personal Finance 20 364 9 457 10 907 Covered business (1) 18 939 8 032 10 907 Glacier 695 695 – Sanlam Personal Loans 73 73 – Multi-Data 172 172 – Sanlam Trust 149 149 – Sanlam Home Loans 120 120 – Anglo African Finance 40 40 – Sanlam Healthcare Management 93 93 – Sanlam Namibia Holdings 83 83 – Sanlam Developing Markets 3 062 1 237 1 825 Covered business (1) 3 040 1 215 1 825 Alfinanz 22 22 – Sanlam UK 1 461 1 014 447 Covered business (1) 685 238 447 Principal 253 253 – Buckles 38 38 – Punter Southall Group 236 236 – Other UK operations – – – Preference shares and interest-bearing instruments 249 249 – Institutional cluster 10 887 10 795 92 Covered business (1) 5 109 5 017 92 Sanlam Investments 5 244 5 244 – Coris Administration 24 24 – Capital Markets 510 510 – Short-term insurance 5 636 5 636 – MiWay 110 110 – Shriram General Insurance 115 115 – Santam 5 411 5 411 – Group operations 41 410 28 139 13 271 Capital diversification (1 137) (1 137) – Discretionary capital 2 785 2 785 – Balanced portfolio – other 2 643 2 643 – Group Equity Value before adjustments to net worth 45 701 32 430 13 271 Net worth adjustments (1 211) (1 211) – Present value of holding company expenses (1 194) (1 194) – Fair value of outstanding equity compensation shares granted by subsidiaries on own shares (17) (17) – Group Equity Value 44 490 31 219 13 271 Value per share (cents) 6 2 172 1 524 648 Analysis per type of business Covered business (1) 27 773 14 502 13 271 Sanlam Personal Finance 18 939 8 032 10 907 Sanlam Developing Markets 3 040 1 215 1 825 Sanlam UK 685 238 447 Institutional cluster 5 109 5 017 92 Other Group operations 5 13 637 13 637 – Discretionary and other capital 3 080 3 080 – Group Equity Value 44 490 31 219 13 271

Group Financial Review 25 SANLAM INTERIM RESULTS 2009 June Reviewed 2009 December Audited 2008 Total Fair value

• f assets

Value of in-force Total Fair value

• f assets

Value of in-force 21 099 9 425 11 674 20 997 9 698 11 299 19 974 8 300 11 674 19 574 8 275 11 299 584 584 – 696 696 – 73 73 – 71 71 – 172 172 – 190 190 – 111 111 – 144 144 – 61 61 – 133 133 – 54 54 – 33 33 – – – – 78 78 – 70 70 – 78 78 – 2 302 946 1 356 2 813 1 049 1 764 2 281 925 1 356 2 796 1 032 1 764 21 21 – 17 17 – 2 335 1 815 520 1 527 1 081 446 1 030 510 520 680 234 446 584 584 – 299 299 – 78 78 – 69 69 – 318 318 – 219 219 – 56 56 – 18 18 – 269 269 – 242 242 – 11 582 11 369 213 11 541 11 472 69 5 333 5 120 213 5 541 5 472 69 5 769 5 769 – 5 581 5 581 – 46 46 – 54 54 – 434 434 – 365 365 – 5 235 5 235 – 5 273 5 273 – 110 110 – 110 110 – 115 115 – 115 115 – 5 010 5 010 – 5 048 5 048 – 42 553 28 790 13 763 42 151 28 573 13 578 (1 057) (1 057) – (1 429) (1 429) – 3 000 3 000 – 2 100 2 100 – 2 852 2 852 – 3 499 3 499 – 47 348 33 585 13 763 46 321 32 743 13 578 (809) (809) – (1 083) (1 083) – (763) (763) – (1 052) (1 052) – (46) (46) – (31) (31) – 46 539 32 776 13 763 45 238 31 660 13 578 2 254 1 587 667 2 213 1 549 664 28 618 14 855 13 763 28 591 15 013 13 578 19 974 8 300 11 674 19 574 8 275 11 299 2 281 925 1 356 2 796 1 032 1 764 1 030 510 520 680 234 446 5 333 5 120 213 5 541 5 472 69 13 935 13 935 – 13 560 13 560 – 3 986 3 986 – 3 087 3 087 – 46 539 32 776 13 763 45 238 31 660 13 578

26 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Change in Group Equity Value

for the six months ended 30 June 2009

Six months Reviewed Full year Audited

R million

2009 2008 2008 Earnings from covered business (1) 770 998 919 Earnings from other Group operations 790 (1 692) (1 885) Operations valued based on ratio of price to assets under management 187 ( 335) (715) Assumption changes (30) 10 ( 99) Change in assets under management 119 (430) (1 005) Earnings for the period and changes in capital requirements 323 ( 103) 188 Foreign currency translation differences and other (225) 188 201 Operations valued based on discounted cash flows 12 31 144 Expected return 156 132 275 Operating experience variances and other 44 12 (6) Assumption changes (160) (194) (104) Foreign currency translation differences (28) 81 (21) Operations valued at net asset value – earnings for the period 60 34 (35) Listed operations – investment return 531 (1 422) (1 279) Earnings from discretionary and other capital (475) 119 (440) Investment return (180) 214 68 Shriram Life Insurance goodwill less value of in-force acquired (39) (43) (43) Treasury shares and other (128) (130) (269) Change in adjustments to net worth (128) 78 (196) Group Equity Value earnings 1 085 (575) (1 406) Dividends paid (1 978) (1 968) (1 968) Shares cancelled ( 615) (1 439) (2 481) Cost of treasury shares acquired 760 (772) (200) Sanlam share buy back – (1 616) (2 238) Transfer to shares cancelled 615 1 439 2 481 Share incentive scheme and other 145 (595) (443) Group Equity Value at beginning of the period 45 238 51 293 51 293 Group Equity Value at end of the period 44 490 46 539 45 238

Group Financial Review 27 SANLAM INTERIM RESULTS 2009

Sanlam Group Return on Group Equity Value

for the six months ended 30 June 2009

Six months Reviewed 2009 Six months Reviewed 2008 Full year Audited 2008 Earnings R million Return % Earnings R million Return % Earnings R million Return % Sanlam Personal Finance 579 5,6 503 4,8 744 3,5 Covered business (1) 446 4,6 490 4,9 453 2,3 Other operations 133 19,6 13 2,2 291 24,4 Sanlam Developing Markets 88 6,4 173 16,4 648 29,6 Covered business (1) 86 6,2 180 17,4 659 30,5 Other operations 2 24,9 (7) (43,8) (11) (39,3) Sanlam UK (113) (14,3) 164 22,7 ( 356) (23,4) Covered business (1) 4 1,2 139 32,5 (36) (3,9) Other operations (117) (25,7) 25 8,5 (320) (53,3) Institutional cluster 475 8,4 (112) (1,8) (723) (5,8) Covered business (1) 234 8,6 189 7,3 (157) (3,0) Sanlam Investments 227 8,3 (343) (10,0) (547) (8,2) Coris Administration (46) (97,8) 8 46,5 16 42,1 Capital markets 60 28,4 34 17,7 (35) (8,8) Short-term insurance 531 21,2 (1 422) (39,6) (1 279) (20,1) Discretionary and other capital (475) 119 (440) Balance of portfolio (180) 240 114 Shares delivered to Sanlam Demutualisation Trust – (26) (46) Shriram Life Insurance goodwill less value of in-force acquired (39) (43) (43) Treasury shares (128) (130) (269) Change in net worth adjustments (128) 78 (196) Return on Group Equity Value 1 085 4,9 (575) (2,2) (1 406) (2,7) Return on Group Equity Value per share 5,2 0,0 (1,7)

Six months Reviewed Full year Audited

R million

2009 2008 2008 Reconciliation of return on Group Equity Value: The return on Group Equity Value reconciles as follows to normalised attributable earnings: Normalised attributable earnings per shareholders’ fund income statement

• n page 34

1 547 1 151 1 758 Earnings recognised directly in equity (263) 481 175 Net foreign currency translation gains (303) 461 60 Dilution from Santam treasury share transactions (5) (29) (19) Share-based payments 45 49 134 Movement in fair value adjustment – shareholders’ fund at fair value 444 (2 168) (2 724) Movement in adjustments to net worth (171) 50 (200) Present value of holding company expenses (142) 30 (259) Fair value of outstanding equity compensation shares granted by subsidiaries on own shares 14 48 63 Change in intangible assets less value of in-force acquired (43) (28) (4) Treasury shares and other (121) (130) (271) Growth from covered business: value of in-force (1) (351) 41 (144) Return on Group Equity Value 1 085 (575) (1 406)

28 Group Financial Review SANLAM INTERIM RESULTS 2009 Six months Reviewed 2009 Six months Reviewed 2008 Full year Audited 2008 Earnings R million Return % Earnings R million Return % Earnings R million Return % Sanlam Personal Finance 1 392 13,7 1 441 14,0 2 697 12,7 Covered business 1 259 13,3 1 428 14,7 2 406 12,0 Other operations 133 19,6 13 2,2 291 24,4 Sanlam Developing Markets 292 21,8 221 21,2 561 25,6 Covered business 290 21,8 228 22,2 572 26,5 Other operations 2 24,9 (7) (43,8) (11) (39,3) Sanlam UK (68) (8,7) 74 10,0 (52) (3,4) Covered business 32 9,6 49 10,9 141 15,3 Other operations (100) (22,2) 25 8,5 (193) (32,2) Institutional cluster 867 15,5 318 5,2 980 7,9 Covered business 353 13,1 333 13,1 558 10,6 Other operations 514 17,6 (15) (0,4) 422 5,9 Short-term insurance 243 9,4 335 10,8 669 10,5 Discretionary and other capital (134) 285 549 Adjusted return on Group Equity Value 2 592 11,8 2 674 10,7 5 404 10,5 Adjusted return on Group Equity Value per share 12,2 13,6 12,4

Sanlam Group Adjusted return on Group Equity Value

for the six months ended 30 June 2009

Group Financial Review 29 SANLAM INTERIM RESULTS 2009

30 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Shareholders’ fund at fair value

at 30 June 2009

June Reviewed 2009

R million

Fair value Fair value adjustment Net asset value Covered business, discretionary and other capital 20 277 120 20 157 Property and equipment 209 – 209 Owner-occupied properties 613 – 613 Goodwill (2) 497 – 497 Value of business acquired (2) 774 – 774 Other intangible assets 48 – 48 Deferred acquisition costs 1 348 – 1 348 Investments 18 422 120 18 302 Equities and similar securities 8 472 112 8 360 Associated companies 225 8 217 Joint ventures Safair Lease Finance – – – Shriram Life Insurance and other (3) 247 – 247 Public sector stocks and loans 550 – 550 Investment properties 491 – 491 Other interest-bearing and preference share investments 8 437 – 8 437 Net term finance – – – Term finance (4 790) – (4 790) Assets held in respect of term finance 4 790 – 4 790 Net deferred tax 279 – 279 Net working capital (1 165) – (1 165) Minority shareholders' interest (748) – (748) Other Group operations 13 637 6 271 7 366 Sanlam Investments 5 244 3 973 1 271 SIM Wholesale 3 603 2 793 810 International 1 314 912 402 Sanlam Collective Investments 327 268 59 Sanlam Personal Finance 1 425 895 530 Glacier 695 414 281 Sanlam Personal Loans (4) 73 33 40 Multi-Data 172 160 12 Sanlam Trust 149 142 7 Sanlam Home Loans 120 – 120 Anglo African Finance 40 18 22 Sanlam Healthcare Management 93 68 25 Sanlam Namibia Holdings 83 60 23 Sanlam UK 776 28 748 Principal 253 1 252 Buckles 38 (5) 43 Punter Southall Group 236 19 217 Other UK operations – 13 (13) Preference shares and interest-bearing instruments 249 – 249 Alfinanz 22 18 4 Coris Administration 24 – 24 Sanlam Capital Markets 510 – 510 MiWay 110 84 26 Shriram General Insurance 115 – 115 Santam 5 411 2 520 2 891 Goodwill held on Group level in respect of the above businesses – (1 247) 1 247 Shareholders’ fund at fair value 33 914 6 391 27 523 Value per share (cents) 1 656 312 1 344

Group Financial Review 31 SANLAM INTERIM RESULTS 2009 June Reviewed 2008 December Audited 2008 Fair value Fair value adjustment Net asset value Fair value Fair value adjustment Net asset value 21 068 169 20 899 20 577 120 20 457 204 – 204 228 – 228 610 – 610 613 – 613 475 – 475 473 – 473 826 – 826 802 – 802 – – – – – – 1 177 – 1 177 1 260 – 1 260 19 990 169 19 821 18 247 120 18 127 11 346 112 11 234 9 036 112 8 924 336 15 321 234 8 226 254 48 206 – – – 211 – 211 208 – 208 1 171 – 1 171 1 411 – 1 411 360 – 360 491 – 491 6 312 (6) 6 318 6 867 – 6 867 – – – – – – (4 933) – (4 933) (5 101) – (5 101) 4 933 – 4 933 5 101 – 5 101 – – – 352 – 352 (1 273) – (1 273) (451) – (451) (941) – (941) (947) – (947) 13 935 6 334 7 601 13 560 5 827 7 733 5 769 4 417 1 352 5 581 3 949 1 632 3 778 3 010 768 3 903 2 844 1 059 1 682 1 174 508 1 358 854 504 309 233 76 320 251 69 1 125 656 469 1 423 837 586 584 317 267 696 387 309 73 (18) 91 71 27 44 172 159 13 190 164 26 111 105 6 144 127 17 61 – 61 133 – 133 54 40 14 33 19 14 – – – 78 58 20 70 53 17 78 55 23 1 305 141 1 164 847 28 819 584 24 560 299 2 297 78 (1) 79 69 8 61 318 62 256 219 – 219 56 56 – 18 18 – 269 – 269 242 – 242 21 21 – 17 13 4 46 20 26 54 28 26 434 – 434 365 – 365 110 34 76 110 58 52 115 – 115 115 – 115 5 010 2 292 2 718 5 048 2 161 2 887 – (1 247) 1 247 – (1 247) 1 247 35 003 6 503 28 500 34 137 5 947 28 190 1 696 315 1 381 1 670 291 1 379

32 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Shareholders’ fund at fair value

at 30 June 2009 continued

June Reviewed 2009

R million

Fair value Fair value adjustment Net asset value Reconciliation to Group Equity Value Group Equity Value before adjustments to net worth 45 701 32 430 13 271 Add: Goodwill and value of business acquired replaced by value of in-force 1 484 1 484 – Merchant Investors 356 356 – Sanlam Sky Solutions 786 786 – Channel Life 136 136 – Shriram Life Insurance (3) 190 190 – Other 16 16 – Less: Value of in-force (13 271) – (13 271) Shareholders' fund at fair value 33 914 33 914 –

R million

June Reviewed 2009 June Reviewed 2008 December Audited 2008 Reconciliation to Group statement of financial position Shareholders' fund at net asset value 27 523 28 500 28 190 Consolidation reserve (460) (834) (539) Shareholders’ fund per Group statement of financial position 27 063 27 666 27 651

excluded in the build-up of the Group Equity Value, as the current value of in-force business for these life insurance companies are included in the embedded value of covered business.

value of in-force business for Shriram Life Insurance is included in the embedded value of covered business.

Personal Loans fair value.

Group Financial Review 33 SANLAM INTERIM RESULTS 2009 June Reviewed 2008 December Audited 2008 Fair value Fair value adjustment Net asset value Fair value Fair value adjustment Net asset value 47 348 33 585 13 763 46 321 32 743 13 578 1 418 1 418 – 1 394 1 394 – 356 356 – 356 356 – 778 778 – 760 760 – 115 115 – 110 110 – 151 151 – 151 151 – 18 18 – 17 17 – (13 763) – (13 763) (13 578) – (13 578) 35 003 35 003 – 34 137 34 137 –

34 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Shareholders’ fund income statement

for the six months ended 30 June 2009

Sanlam Personal Finance Sanlam Developing Markets Sanlam UK

R million

2009 2008 2009 2008 2009 2008 Financial services income 3 184 3 090 1 794 1 504 182 182 Sales remuneration (532) (508) (462) (419) (28) (23) Income after sales remuneration 2 652 2 582 1 332 1 085 154 159 Underwriting policy benefits (808) (782) (736) (559) – – Administration costs (952) (905) (454) (400) (141) (113) Result from financial services before tax 892 895 142 126 13 46 Tax on financial services income (189) (203) (20) (12) (3) (8) Result from financial services after tax 703 692 122 114 10 38 Minority shareholders’ interest (12) (14) (37) (36) 3 (1) Net result from financial services 691 678 85 78 13 37 Net investment income 343 401 34 38 1 11 Dividends received – Group companies 110 86 – – – – Other investment income 270 391 66 78 1 12 Tax on investment income (37) (76) (16) (14) – (1) Minority shareholders’ interest – – (16) (26) – – Core earnings 1 034 1 079 119 116 14 48 Project expenses (13) (32) (2) – – – Amortisation of value of business aquired – – (23) (21) (12) (10) BEE transaction cost – – – – – – Net equity-accounted headline earnings – – – 3 – – Equity-accounted headline earnings – – (1) 6 – – Minority shareholders’ interest – – 1 (3) – – Net investment surpluses (44) (998) (48) (37) – – Investment surpluses – Group companies (63) (945) – – – – Other investment surpluses 28 (72) (97) (71) – – Tax on investment surpluses (9) 19 30 4 – – Minority shareholders’ interest – – 19 30 – – Secondary tax on companies – after minorities (119) (136) – (14) – – Net loss from discontinued operations – – – – – – Loss from discontinued operations – – – – – – Minority shareholders’ interest – – – – – – Normalised headline earnings 858 (87) 46 47 2 38 Other equity-accounted earnings – – – – – 32 Profit on disposal of subsidiaries – – – – – – Impairment (3) (120) – (1) (43) – Normalised attributable earnings 855 (207) 46 46 (41) 70 Fund transfers – – – – – – Attributable profit per Group statement of comprehensive income 855 (207) 46 46 (41) 70 Ratios Admin ratio (1) 35,9% 35,1% 34,1% 36,9% 91,6% 71,1% Operating margin (2) 33,6% 34,7% 10,7% 11,6% 8,4% 28,9% Diluted earnings per share Adjusted weighted average number of shares (million) Net result from financial services (cents) 33,8 31,8 4,2 3,7 0,6 1,7 Core earnings (cents)

Sanlam UK to Sanlam Investments.

Group Financial Review 35 SANLAM INTERIM RESULTS 2009 Sanlam Employee Benefits Short-term Insurance Sanlam Investments Sanlam Capital Markets Subtotal: Operating businesses 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 1 056 1 006 6 415 5 829 928 1 097 162 97 13 721 12 805 (19) (18) (969) (837) – – – – (2 010) (1 805) 1 037 988 5 446 4 992 928 1 097 162 97 11 711 11 000 (815) (726) (4 503) (3 937) – – – – (6 862) (6 004) (130) (145) (699) (652) (558) (676) (101) (97) (3 035) (2 988) 92 117 244 403 370 421 61 – 1 814 2 008 (27) (34) (71) (92) (91) (96) (2) 34 ( 403) (411) 65 83 173 311 279 325 59 34 1 411 1 597 – – (91) (146) (15) (38) – – (152) (235) 65 83 82 165 264 287 59 34 1 259 1 362 122 95 54 53 3 19 – – 557 617 – – – – – – – – 110 86 142 117 85 103 9 29 – – 573 730 (20) (22) 15 (4) (2) (4) – – (60) (121) – – (46) (46) (4) (6) – – (66) (78) 187 178 136 218 267 306 59 34 1 816 1 979 – – – (3) – – – – (15) (35) – – (2) – – – – – (37) (31) – – (3) (3) – – – – (3) (3) – – 10 6 – (19) – – 10 (10) – – 17 11 – (16) – – 16 1 – – (7) (5) – (3) – – (6) (11) 15 (56) 20 (137) (4) (36) – – (61) (1 264) – – – – – – – – (63) (945) 21 (65) 56 (396) (2) (35) – – 6 (639) (6) 9 (18) 138 1 – – – (2) 170 – – (18) 121 (3) (1) – – (2) 150 – – (5) (10) – – – – (124) (160) – – – (35) – – – – – (35) – – – (63) – – – – – (63) – – – 28 – – – – – 28 202 122 156 36 263 251 59 34 1 586 441 – – – – – – – – – 32 – – – – – – – – – – (8) – (3) (3) (1) (2) – – (58) (126) 194 122 153 33 262 249 59 34 1 528 347 – – – – – – – – – – 194 122 153 33 262 249 59 34 1 528 347 12,5% 14,7% 12,8% 13,1% 60,1% 61,6% 62,3% 100,0% 25,9% 27,2% 8,9% 11,8% 4,5% 8,1% 39,9% 38,4% 37,7% 0,0% 15,5% 18,3% 3,2 3,9 4,0 7,7 12,9 13,5 2,9 1,6 61,6 63,9

36 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Shareholders’ fund income statement

for the six months ended 30 June 2009 continued

Subtotal: Operating Business Corporate & Other Consolidation entries

R million

2009 2008 2009 2008 2009 2008 Financial services income 13 721 12 805 87 75 – – Sales remuneration (2 010) (1 805) – – – – Income after sales remuneration 11 711 11 000 87 75 – – Underwriting policy benefits (6 862) (6 004) – – – – Administration costs (3 035) (2 988) (123) (117) – – Result from financial services before tax 1 814 2 008 (36) (42) – – Tax on financial services income (403) (411) 11 14 – – Result from financial services after tax 1 411 1 597 (25) (28) – – Minority shareholders’ interest (152) (235) – – – – Net result from financial services 1 259 1 362 (25) (28) – – Net investment income 557 617 108 48 (110) (86) Dividends received – Group companies 110 86 – – (110) (86) Other investment income 573 730 118 32 – – Tax on investment income (60) (121) (10) 16 – – Minority shareholders’ interest (66) (78) – – – – Core earnings 1 816 1 979 83 20 (110) (86) Project expenses (15) (35) – ( 5) – – Amortisation of value of business aquired (37) (31) – – – – BEE transaction cost (3) (3) – – – – Net equity-accounted headline earnings 10 (10) – 6 – – Equity-accounted headline earnings 16 1 – 6 – – Minority shareholders’ interest (6) (11) – – – – Net investment surpluses (61) (1 264) 21 (128) 63 945 Investment surpluses – Group companies (63) (945) – – 63 945 Other investment surpluses 6 (639) 21 (128) – – Tax on investment surpluses (2) 170 – – – – Minority shareholders’ interest (2) 150 – – – – Secondary tax on companies – after minorities (124) (160) (38) 61 – – Net loss from discontinued operations – (35) – – – – Loss from discontinued operations – (63) – – – – Minority shareholders’ interest – 28 – – – – Normalised headline earnings 1 586 441 66 (46) (47) 859 Other equity-accounted earnings – 32 – – – – Profit on disposal of subsidiaries – – – – – – Impairment (58) (126) – (9) – – Normalised attributable earnings 1 528 347 66 (55) (47) 859 Fund transfers – – – – 59 701 Attributable profit per Group statement of comprehensive income 1 528 347 66 (55) 12 1 560 Ratios Admin ratio (1) 25,9% 27,2% Operating margin (2) 15,5% 18,3% Diluted earnings per share Adjusted weighted average number of shares (million) Net result from financial services (cents) 61,6 63,9 (1,2) (1,3) – – Core earnings (cents)

Sanlam UK to Sanlam Investments.

Group Financial Review 37 SANLAM INTERIM RESULTS 2009 Total Six months Reviewed Total Full year Audited 2009 2008 2008 13 808 12 880 26 969 (2 010) (1 805) (3 861) 11 798 11 075 23 108 (6 862) (6 004) (12 287) (3 158) (3 105) (6 561) 1 778 1 966 4 260 (392) (397) ( 966) 1 386 1 569 3 294 (152) (235) (492) 1 234 1 334 2 802 555 579 1 068 – – – 691 762 1 432 (70) (105) (221) (66) (78) (143) 1 789 1 913 3 870 (15) (40) (56) (37) (31) (77) (3) (3) (7) 10 (4) 16 16 7 24 (6) (11) (8) 23 (447) (1 699) – – – 27 (767) (2 515) (2) 170 625 (2) 150 191 (162) (99) (59) – (35) (22) – (63) (41) – 28 19 1 605 1 254 1 966 – 32 33 – – 3 (58) (135) (244) 1 547 1 151 1 758 59 701 736 1 606 1 852 2 494 26,8% 28,0% 28,4% 15,1% 17,8% 18,4% 2 044,4 2 132,6 2 094,0 60,4 62,6 133,8 87,5 89,7 184,8

38 Group Financial Review SANLAM INTERIM RESULTS 2009

Notes to the shareholders’ fund information

for the six months ended 30 June 2009

• 1. Analysis of new business and total funds received

Analysed per business, reflecting the split between life and non-life business Total Life Insurance (1) Life Licence (2) Other

R million

2009 2008 2009 2008 2009 2008 2009 2008 Sanlam Personal Finance 14 700 15 824 5 433 6 014 – – 9 267 9 810 South Africa 10 214 11 559 5 061 5 820 – – 5 153 5 739 Recurring 487 558 452 505 – – 35 53 Single 8 995 10 164 3 877 4 478 – – 5 118 5 686 Continuations 732 837 732 837 – – – – Africa 4 486 4 265 372 194 – – 4 114 4 071 Recurring 38 32 38 32 – – – – Single 4 448 4 233 334 162 – – 4 114 4 071 Sanlam Developing Markets 1 316 1 214 1 316 1 214 – – – – South Africa 635 665 635 665 – – – – Recurring 370 352 370 352 – – – – Single 265 313 265 313 – – – – Africa 605 449 605 449 – – – – Recurring 195 150 195 150 – – – – Single 410 299 410 299 – – – – Other international 76 100 76 100 – – – – Recurring 58 37 58 37 – – – – Single 18 63 18 63 – – – – Sanlam UK 955 807 451 807 – – 504 – Other international 955 807 451 807 – – 504 – Recurring 5 10 5 10 – – – – Single 950 797 446 797 – – 504 – Sanlam Employee Benefits 142 270 142 270 – – – – South Africa 142 270 142 270 – – – – Recurring 76 82 76 82 – – – – Single 66 188 66 188 – – – – Sanlam Investment 25 408 23 035 – – 991 686 24 417 22 349 Employee benefits 410 207 – – 410 207 – – Recurring 6 – – – 6 – – – Single 404 207 – – 404 207 – – Collective investment schemes 10 269 8 839 – – – – 10 269 8 839 Retail funds 5 031 5 603 – – – – 5 031 5 603 Wholesale business 5 238 3 236 – – – – 5 238 3 236 Segregated funds 12 821 12 494 – – – – 12 821 12 494 Wholesale business 9 688 8 478 – – – – 9 688 8 478 Private Investments 3 133 4 016 – – – – 3 133 4 016 Non-South African 1 908 1 495 – – 581 479 1 327 1 016 Short-term insurance 6 179 6 085 – – – – 6 179 6 085 New business excluding white label 48 700 47 235 7 342 8 305 991 686 40 367 38 244 White label 2 785 3 750 – – – – 2 785 3 750 Sanlam Collective Investments 2 785 3 750 – – – – 2 785 3 750 Sanlam Developing Markets – – – – – – – – Total new business 51 485 50 985 7 342 8 305 991 686 43 152 41 994 Recurring premiums on existing funds: Sanlam Personal Finance 4 763 4 525 Sanlam Developing Markets 1 337 1 106 Sanlam UK 300 286 Institutional cluster 1 484 1 462 Total funds received 59 369 58 364

Life insurance business relates to business written under a life licence that is included in the calculation of embedded value of covered business.

Life licence business relates to investment products provided by means of a life insurance policy where there is very little or no insurance risk. Life licence business is excluded from the calculation of embedded value of covered business.

Group Financial Review 39 SANLAM INTERIM RESULTS 2009

• 1. Analysis of new business and total funds received (continued)

R million

2009 2008 Analysed per market Retail Life business 5 696 6 485 Sanlam Personal Finance 5 061 5 820 Sanlam Developing Markets 635 665 Non-life business 13 317 15 358 Sanlam Personal Finance 5 153 5 739 Sanlam Private Investments 3 133 4 016 Sanlam Collective Investments 5 031 5 603 South African 19 013 21 843 Non-South African 6 122 5 621 Sanlam Personal Finance 4 486 4 265 Sanlam Developing Markets 681 549 Sanlam UK 955 807 Total retail 25 135 27 464 Institutional Group life business 552 477 Sanlam Employee Benefits 142 270 Investment Management 410 207 Non-life business 14 926 11 714 Segregated 7 920 6 379 Sanlam Multi-Manager 1 768 2 099 Sanlam Collective Investments 5 238 3 236 South African 15 478 12 191 Investment Management Non-South African 1 908 1 495 Total institutional 17 386 13 686 White label 2 785 3 750 Sanlam Collective Investments 2 785 3 750 Sanlam Developing Markets – – Short-term insurance 6 179 6 085 Total new business 51 485 50 985

40 Group Financial Review SANLAM INTERIM RESULTS 2009

Notes to the shareholders’ fund information

for the six months ended 30 June 2009 continued

• 2. Analysis of payments to clients

Total Life Insurance (1) Life Licence (2) Other

R million

2009 2008 2009 2008 2009 2008 2009 2008 Sanlam Personal Finance 16 052 18 128 9 221 9 677 – – 6 831 8 451 South Africa 12 755 13 791 8 804 9 351 – – 3 951 4 440 Surrenders 1 777 1 962 1 777 1 962 – – – – Other 10 978 11 829 7 027 7 389 – – 3 951 4 440 Africa 3 297 4 337 417 326 – – 2 880 4 011 Surrenders 130 62 130 62 – – – – Other 3 167 4 275 287 264 – – 2 880 4 011 Sanlam Developing Markets 2 043 1 647 2 043 1 647 – – – – South Africa 1 664 1 326 1 664 1 326 – – – – Surrenders 162 202 162 202 – – – – Other 1 502 1 124 1 502 1 124 – – – – Africa 374 321 374 321 – – – – Surrenders 75 91 75 91 – – – – Other 299 230 299 230 – – – – Other international 5 – 5 – – – – – Surrenders 5 – 5 – – – – – Other – – – – – – – – Sanlam UK 1 366 1 002 759 1 002 – – 607 – Other international 1 366 1 002 759 1 002 – – 607 – Surrenders 1 224 740 617 740 – – 607 – Other 142 262 142 262 – – – – Sanlam Employee Benefits 1 852 1 993 1 852 1 993 – – – – South Africa 1 852 1 993 1 852 1 993 – – – – Terminations 134 195 134 195 – – – – Other 1 718 1 798 1 718 1 798 – – – – Sanlam Investments 22 611 20 236 – – 972 1 411 21 639 18 825 Employee benefits 957 1 164 – – 957 1 164 – – Terminations 422 687 – – 422 687 – – Other 535 477 – – 535 477 – – Collective investment schemes 7 587 7 873 – – – – 7 587 7 873 Retail funds 4 265 5 564 – – – – 4 265 5 564 Wholesale business 3 322 2 309 – – – – 3 322 2 309 Segregated funds 12 570 9 286 – – – – 12 570 9 286 Wholesale business 6 866 7 853 – – – – 6 866 7 853 Private Investments 5 704 1 433 – – – – 5 704 1 433 Non-South African 1 497 1 913 – – 15 247 1 482 1 666 Short-term insurance 4 503 4 317 – – – – 4 503 4 317 Payments to clients excluding white label 48 427 47 323 13 875 14 319 972 1 411 33 580 31 593 White label 3 265 5 571 – – – – 3 265 5 571 Sanlam Collective Investments 3 265 5 571 – – – – 3 265 5 571 Sanlam Developing Markets – – – – – – – – Total payments to clients 51 692 52 894 13 875 14 319 972 1 411 36 845 37 164

Life insurance business relates to business written under a life licence that is included in the calculation of embedded value of covered business.

Life licence business relates to investment products provided by means of a life insurance policy where there is very little or no insurance risk. Life licence business is excluded from the calculation of embedded value of covered business.

Group Financial Review 41 SANLAM INTERIM RESULTS 2009

• 3. Analysis of net inflow/(outflow) of funds

Total Life Insurance (1) Life Licence (2) Other R million 2009 2008 2009 2008 2009 2008 2009 2008 Sanlam Personal Finance 3 411 2 221 929 861 – – 2 482 1 360 South Africa 1 989 2 068 741 768 – – 1 248 1 300 Africa 1 422 153 188 93 – – 1 234 60 Sanlam Developing Markets 610 673 610 673 – – – – South Africa (132) 83 (132) 83 – – – – Africa 636 471 636 471 – – – – Other international 106 119 106 119 – – – – Sanlam UK (111) 91 (8) 91 – – (103) – Sanlam Employee Benefits (499) (517) (499) (517) – – – – Sanlam Investments 3 070 3 055 – – 292 (469) 2 778 3 524 Employee benefits (274) (701) – – (274) (701) – – Collective investment schemes 2 682 966 – – – – 2 682 966 Retail funds 766 39 – – – – 766 39 Wholesale business 1 916 927 – – – – 1 916 927 Segregated funds 251 3 208 – – – – 251 3 208 Wholesale business 2 822 625 – – – – 2 822 625 Private Investments (2 571) 2 583 – – – – (2 571) 2 583 Non-South African 411 (418) – – 566 232 (155) (650) Santam 1 676 1 768 – – – – 1 676 1 768 Net inflow/(outflow) excluding white label 8 157 7 291 1 032 1 108 292 (469) 6 833 6 652 White label (480) (1 821) – – – – (480) (1 821) Sanlam Collective Investments (480) (1 821) – – – – (480) (1 821) Sanlam Developing Markets – – – – – – – – Total net inflow/(outflow) 7 677 5 470 1 032 1 108 292 (469) 6 353 4 831

Life insurance business relates to business written under a life licence that is included in the calculation of embedded value of covered business.

Life licence business relates to investment products provided by means of a life insurance policy where there is very little or no insurance risk. Life licence business is excluded from the calculation of embedded value of covered business.

42 Group Financial Review SANLAM INTERIM RESULTS 2009

Notes to the shareholders’ fund information

for the six months ended 30 June 2009 continued

• 3. Analysis of net inflow/(outflow) of funds (continued)

R million

2009 2008 Analysed per market Retail Life business 609 851 Sanlam Personal Finance 741 768 Sanlam Developing Markets (132) 83 Non-life business (557) 3 922 Sanlam Personal Finance 1 248 1 300 Sanlam Private Investments (2 571) 2 583 Sanlam Collective Investments 766 39 South African 52 4 773 Non-South African 2 053 834 Sanlam Personal Finance 1 422 153 Sanlam Developing Markets 742 590 Sanlam UK (111) 91 Total retail 2 105 5 607 Institutional Group life business (773) (1 218) Sanlam Employee Benefits (499) (517) Investment Management (274) (701) Non-life business 4 738 1 552 Segregated 3 032 2 974 Sanlam Multi-Manager (210) (2 349) Sanlam Collective Investments 1 916 927 South African 3 965 334 Investment Management Non-South African 411 (418) Total institutional 4 376 (84) White label (480) (1 821) Sanlam Collective Investments (480) (1 821) Sanlam Developing Markets – – Short-term insurance 1 676 1 768 Total net inflow 7 677 5 470

Group Financial Review 43 SANLAM INTERIM RESULTS 2009

• 4. Normalised diluted earnings per share

In terms of IFRS, the policyholders’ fund’s investments in Sanlam shares and Group subsidiaries are not reflected as equity investments in the Sanlam balance sheet, but deducted in full from equity on consolidation (in respect of Sanlam shares) or reflected at net asset value (in respect of subsidiaries). The valuation of the related policy liabilities however includes the fair value of these shares, resulting in a mismatch between policy liabilities and policyholder investments, with a consequential impact on the Group’s earnings. The number of shares in issue must also be reduced with the treasury shares held by the policyholders’ fund for the calculation of IFRS basic and diluted earnings per share. This is, in management’s view, not a true representation of the earnings attributable to the Group’s shareholders, specifically in instances where the share prices and/or the number of shares held by the policyholders’ fund varies significantly. The Group therefore calculates normalised diluted earnings per share to eliminate the impact of investments in Sanlam shares and Group subsidiaries held by the policyholders’ fund. Six months Reviewed Full year Audited 2009 cents 2008 cents 2008 cents Normalised diluted earnings per share: Net result from financial services 60,4 62,6 133,8 Core earnings 87,5 89,7 184,8 Headline earnings 78,5 58,8 93,9 Profit attributable to shareholders’ fund 75,7 54,0 84,0 R million R million R million Analysis of normalised earnings (refer shareholders’ fund income statement on page 34): Net result from financial services 1 234 1 334 2 802 Core earnings 1 789 1 913 3 870 Headline earnings 1 605 1 254 1 966 Profit attributable to shareholders’ fund 1 547 1 151 1 758 Reconciliation of normalised headline earnings: Headline earnings per note 1 on page 60 1 664 1 955 2 702 Less: Fund transfers (59) (701) (736) Normalised headline earnings 1 605 1 254 1 966 million million million Adjusted number of shares: Weighted average number of shares for diluted earnings per share (refer to note 1 on page 60) 2 015,1 2 068,1 2 043,5 Add: Weighted average Sanlam shares held by policyholders 29,3 64,5 50,5 Adjusted weighted average number of shares for normalised diluted earnings per share 2 044,4 2 132,6 2 094,0

44 Group Financial Review SANLAM INTERIM RESULTS 2009

Notes to the shareholders’ fund information

for the six months ended 30 June 2009 continued

• 5. Fair value of other Group operations

The shareholders’ fund at fair value includes the value of the Sanlam businesses based on directors’ valuation, apart from Santam, which is valued according to ruling share prices.

Valuation methodology

The fair value of the unlisted Sanlam businesses has been determined by the application of the following valuation methodologies: Fair value of Sanlam business Valuation method June Reviewed December Audited

R million

2009 2008 2008 Ratio of price to assets under management 5 580 5 839 5 958 SIM Wholesale 3 603 3 778 3 903 SIM International 1 314 1 682 1 358 Sanlam Collective Investments 327 309 320 Principal 253 – 299 Sanlam Namibia Holdings 83 70 78 Discounted cash flows 1 911 1 765 1 964 Glacier 695 584 696 Sanlam Personal Loans 73 73 71 Multi-Data 172 172 190 Sanlam Trust 149 111 144 Sanlam Home Loans 120 61 133 Punter Southall Group 236 318 219 Other 466 446 511 Net asset value 735 1 321 590 Principal – 584 – Buckles – 78 – MiWay 110 110 110 Shriram General Insurance 115 115 115 Sanlam Capital Markets 510 434 365 Fair value of unlisted businesses 8 226 8 925 8 512 The main assumptions applied in the primary valuation for the unlisted businesses are presented below. The sensitivity analysis is based on the following changes in assumptions: Assumption Change in assumption Ratio of price to assets under management (P/AuM) 0,1% Risk discount rate (RDR) 1,0% Perpetuity growth rate (PGR) 1,0% Fair value of Sanlam business

R million

Weighted average assumption Base value Decrease in assumption Increase in assumption Ratio of price to assets under management P/AuM = 1,46% (Dec 2008: 1,44%) 5 580 5 096 6 064 Discounted cash flows RDR = 18,3% (Dec 2008: 17,9%) 1 911 2 032 1 809 PGR = 2,5% – 5% (Dec 2008: 2,5% – 5%) 1 911 1 869 1 959

Group Financial Review 45 SANLAM INTERIM RESULTS 2009

• 6. Value per share

June Reviewed December Audited 2009 million 2008 million 2008 million Number of shares for value per share: Number of ordinary shares in issue at beginning of the period 2 190,1 2 303,6 2 303,6 Shares cancelled (30,1) (63,5) (113,5) Number of ordinary shares in issue 2 160,0 2 240,1 2 190,1 Shares held by subsidiaries in shareholders’ fund (159,8) (218,5) (197,3) Outstanding shares and share options in respect of Sanlam Limited long-term incentive schemes 37,6 43,2 45,5 Number of shares under option that would have been issued at fair value (10,5) (14,4) (12,7) Convertible deferred shares held by Ubuntu-Botho 20,9 13,9 18,6 Adjusted number of shares for value per share 2 048,2 2 064,3 2 044,2

• 7. Share repurchases

The Sanlam shareholders granted general authorities to the Group at the 2009 and 2008 annual general meetings to repurchase Sanlam shares in the market. The Group did not acquire any shares during 2009 in terms of the general authorities.

46 Group Financial Review SANLAM INTERIM RESULTS 2009 June Reviewed December Audited

R million

Note 2009 2008 2008 Sanlam Personal Finance 18 939 19 974 19 574 Adjusted net worth 8 032 8 300 8 275 Net value of in-force covered business 10 907 11 674 11 299 Value of in-force covered business 12 649 13 309 12 809 Cost of capital (1 613) (1 528) (1 378) Minority shareholders’ interest (129) (107) (132) Sanlam Developing Markets 3 040 2 281 2 796 Adjusted net worth 1 215 925 1 032 Net value of in-force covered business 1 825 1 356 1 764 Value of in-force covered business 2 428 1 956 2 432 Cost of capital (273) (280) (284) Minority shareholders’ interest (330) (320) (384) Sanlam UK 685 1 030 680 Adjusted net worth 238 510 234 Net value of in-force covered business 447 520 446 Value of in-force covered business 479 560 481 Cost of capital (32) (40) (35) Minority shareholders’ interest – – – Sanlam Employee Benefits 5 109 5 333 5 541 Adjusted net worth 5 017 5 120 5 472 Net value of in-force covered business 92 213 69 Value of in-force covered business 1 014 1 075 824 Cost of capital (922) (862) (755) Minority shareholders’ interest – – – Embedded value of covered business 27 773 28 618 28 591 Adjusted net worth (1) 14 502 14 855 15 013 Net value of in-force covered business 1 13 271 13 763 13 578 Embedded value of covered business 27 773 28 618 28 591

Sanlam Group Embedded value of covered business

at 30 June 2009

Group Financial Review 47 SANLAM INTERIM RESULTS 2009

48 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Change in embedded value of covered business

for the six months ended 30 June 2009

Six months Reviewed 2009

R million

Note Total Value of in-force Cost of capital Adjusted net worth Embedded value of covered business at beginning

• f the period

28 591 15 939 (2 361) 15 013 Value of new business 2 243 882 (37) (602) Net earnings from existing covered business 1 145 (307) 83 1 369 Expected return on value of in-force business 839 771 68 – Expected transfer of profit to adjusted net worth – (1 155) – 1 155 Operating experience variances 3 289 102 (1) 188 Operating assumption changes 4 17 (25) 16 26 Expected investment return on adjusted net worth 546 – – 546 Embedded value earnings from operations 1 934 575 46 1 313 Economic assumption changes 5 (1 020) (526) (487) (7) Tax changes – change in corporate tax rates – – – – Investment variances – value of in-force 176 88 41 47 Investment variances – investment return on adjusted net worth (209) – – (209) Exchange rate movements (96) (95) 7 (8) Net project expenses 6 (15) – – (15) Embedded value earnings from covered business 770 42 (393) 1 121 Acquired value of in-force 228 72 (28) 184 Change in utilisation of capital diversification (292) – – (292) Transfers from covered business (1 524) – – (1 524) Embedded value of covered business at end of the period 27 773 16 053 (2 782) 14 502 Analysis of earnings from covered business Sanlam Personal Finance 446 (157) (235) 838 Sanlam Developing Markets 86 11 6 69 Sanlam UK 4 (2) 3 3 Sanlam Employee Benefits 234 190 (167) 211 Embedded value earnings from covered business 770 42 (393) 1 121

June 2008 comparative information has been restated to allocate the change in minority shareholders’ interest to the individual line items. All line items are accordingly presented net of minority shareholders’ interest.

Group Financial Review 49 SANLAM INTERIM RESULTS 2009 Six months Reviewed Full year Audited 2008 2008 Total Value of in-force Cost of capital Adjusted net worth Total 28 432 16 316 (2 594) 14 710 28 432 250 777 (36) (491) 612 1 200 (188) 112 1 276 1 885 886 857 29 – 1 838 – (1 070) – 1 070 – 250 71 6 173 278 64 (46) 77 33 (231) 588 – – 588 1 180 2 038 589 76 1 373 3 677 (705) (532) (157) (16) 356 196 191 5 – 215 (234) (288) 54 – (1 435) (368) – – (368) (1 864) 103 113 (10) – 23 (32) – – (32) (53) 998 73 (32) 957 919 – – – – – (175) – – (175) 197 (637) – – (637) (957) 28 618 16 389 (2 626) 14 855 28 591 490 (158) 28 620 453 180 63 (7) 124 659 139 54 (8) 93 (36) 189 114 (45) 120 (157) 998 73 (32) 957 919

50 Group Financial Review SANLAM INTERIM RESULTS 2009

Sanlam Group Value of new business

for the six months ended 30 June 2009

Six months Reviewed Full year Audited

R million

Note 2009 2008 2008 Value of new business (at point of sale): Gross value of new business 321 332 787 Sanlam Personal Finance 154 178 419 Sanlam Developing Markets 156 128 343 Sanlam UK 1 6 6 Sanlam Employee Benefits 10 20 19 Cost of capital (45) (42) (89) Sanlam Personal Finance (19) (18) (33) Sanlam Developing Markets (20) (15) (41) Sanlam UK (1) (3) (5) Sanlam Employee Benefits (5) (6) (10) Value of new business 276 290 698 Sanlam Personal Finance 135 160 386 Sanlam Developing Markets 136 113 302 Sanlam UK – 3 1 Sanlam Employee Benefits 5 14 9 Value of new business attributable to: Shareholders’ fund 2 243 250 612 Sanlam Personal Finance 133 157 377 Sanlam Developing Markets 105 76 225 Sanlam UK – 3 1 Sanlam Employee Benefits 5 14 9 Minority shareholders’ interest 33 40 86 Sanlam Personal Finance 2 3 9 Sanlam Developing Markets 31 37 77 Sanlam UK – – – Sanlam Employee Benefits – – – Value of new business 276 290 698 Geographical analysis: South Africa 196 198 507 Africa 77 85 181 Other international 3 7 10 Value of new business 276 290 698

Group Financial Review 51 SANLAM INTERIM RESULTS 2009 Six months Reviewed Full year Audited

R million

2009 2008 2008 Analysis of new business profitability: Before minorities: Present value of new business premiums 11 469 12 141 26 033 Sanlam Personal Finance 7 488 8 089 17 371 Sanlam Developing Markets 2 814 2 330 5 332 Sanlam UK 463 836 1 484 Sanlam Employee Benefits 704 886 1 846 New business margin 2,41% 2,39% 2,68% Sanlam Personal Finance 1,80% 1,98% 2,22% Sanlam Developing Markets 4,83% 4,85% 5,66% Sanlam UK 0,00% 0,36% 0,07% Sanlam Employee Benefits 0,71% 1,58% 0,49% After minorities: Present value of new business premiums 10 906 11 501 24 459 Sanlam Personal Finance 7 395 8 020 17 080 Sanlam Developing Markets 2 344 1 759 4 049 Sanlam UK 463 836 1 484 Sanlam Employee Benefits 704 886 1 846 New business margin 2,23% 2,17% 2,50% Sanlam Personal Finance 1,80% 1,96% 2,21% Sanlam Developing Markets 4,48% 4,32% 5,56% Sanlam UK 0,00% 0,36% 0,07% Sanlam Employee Benefits 0,71% 1,58% 0,49%

52 Group Financial Review SANLAM INTERIM RESULTS 2009

• 1. Value of in-force sensitivity analysis

Gross value

• f in-force

business Cost of capital Net value

• f in-force

business Change from base value R million R million R million % Base value 16 053 (2 782) 13 271

• ฀Risk฀discount฀rate฀increase฀by฀1%

15 108 (3 382) 11 726 (12)

• 2. Value of new business sensitivity analysis

Gross value

• f new

business Cost of capital Value of new business Change from base value R million R million R million % Base value 280 (37) 243

• ฀Risk฀discount฀rate฀increase฀by฀1%

241 (43) 198 (19)

• 3. Operating experience variances

Six months Reviewed Full year Audited

R million

2009 2008 2008 Risk experience 167 90 307 Investment guarantee reserve 64 24 (117) Working capital and other 58 136 88 Total operating experience variances 289 250 278

• 4. Operating assumption changes

Six months Reviewed Full year Audited

R million

2009 2008 2008 Mortality and morbidity 34 (13) (196) Persistency (6) (34) (31) Modelling improvements and other (11) 111 (4) Total operating assumption changes 17 64 (231)

• 5. Economic assumption changes

Six months Reviewed Full year Audited

R million

2009 2008 2008 Investment yields and risk premiums (707) (710) 363 Long-term asset mix assumptions (313) 5 (7) Total economic assumption changes (1 020) (705) 356

• 6. Net project expenses

Net project expenses relate to once-off expenditure on the Group’s distribution platform that has not been allowed for in the embedded value assumptions.

Notes to the embedded value of covered business

for the six months ended 30 June 2009

Group Financial Review 53 SANLAM INTERIM RESULTS 2009

• 7. Economic assumptions

June Reviewed December Audited % 2009 2008 2008 Gross investment return, risk discount rate and inflation Sanlam life Point used on the relevant yield curve 9 year 9 year 9 year Fixed-interest securities 9,2 10,7 7,3 Equities and offshore investments 12,7 14,2 10,8 Hedged equities 9,7 11,2 7,8 Property 10,2 11,7 8,3 Cash 8,2 9,7 6,3 Return on required capital 10,0 12,2 8,8 Inflation rate 6,2 7,7 4,3 Risk discount rate 11,7 13,2 9,8 SDM Limited Point used on the relevant yield curve 6 year 6 year 6 year Fixed-interest securities 8,7 11,0 7,3 Equities and offshore investments 12,2 14,5 10,8 Hedged equities n/a n/a n/a Property 9,7 12,0 8,3 Cash 7,7 10,0 6,3 Return on required capital 10,0 12,3 8,6 Inflation rate 5,7 8,0 4,3 Risk discount rate 11,2 13,5 9,8 Merchant investors Point used on the relevant yield curve 15 year 15 year 15 year Fixed-interest securities 4,1 5,2 3,7 Equities and offshore investments 7,3 8,4 7,0 Hedged equities 7,3 8,4 7,0 Property 7,3 8,4 7,0 Cash 4,1 5,2 3,7 Return on required capital 4,1 5,2 3,7 Inflation rate 3,3 4,5 2,9 Risk discount rate 7,8 8,9 7,5 Botswana Life Insurance Fixed-interest securities 10,5 10,5 10,5 Equities and offshore investments 14,0 14,0 14,0 Hedged equities n/a n/a n/a Property 11,5 11,5 11,5 Cash 9,5 9,5 9,5 Return on required capital 10,6 10,6 10,6 Inflation rate 7,5 7,5 7,5 Risk discount rate 14,0 14,0 14,0

54 Group Financial Review SANLAM INTERIM RESULTS 2009

Notes to the embedded value of covered business

for the six months ended 30 June 2009 continued

• 7. Economic assumptions (continued)

June Reviewed December Audited % 2009 2008 2008 Asset mix for assets supporting required capital Sanlam life Equities 34 44 44 Hedged equities 13 13 13 Property 3 3 3 Fixed-interest securities 15 25 25 Cash 35 15 15 100 100 100 SDM Limited Equities 50 50 50 Hedged equities – – – Property – – – Fixed-interest securities – – – Cash 50 50 50 100 100 100 Merchant investors Equities – – – Hedged equities – – – Property – – – Fixed-interest securities – – – Cash 100 100 100 100 100 100 Botswana Life Insurance Equities 15 15 15 Hedged equities – – – Property 10 10 10 Fixed-interest securities 25 25 25 Cash 50 50 50 100 100 100

Group Financial Review 55 SANLAM INTERIM RESULTS 2009

Contents

Statement of financial position 56 Statement of comprehensive income 57 Statement of changes in equity 58 Cash flow statement 59 Notes to the financial statements 60

Group Financial Statements

for the six months ended 30 June 2009

56 Group Financial Review SANLAM INTERIM RESULTS 2009

Statement of financial position

at 30 June 2009

R million

Reviewed June 2009 December Audited 2008 Assets Property and equipment 376 382 Owner-occupied properties 651 652 Goodwill 2 668 2 623 Other intangible assets 50 – Value of business acquired 1 205 1 309 Deferred acquisition costs 2 047 1 970 Long-term reinsurance assets 493 506 Investments 262 316 268 530 Properties 15 490 15 981 Equity-accounted investments 1 314 1 317 Equities and similar securities 119 926 120 284 Public sector stocks and loans 46 460 50 531 Debentures, insurance policies, preference shares and other loans 34 763 35 309 Cash, deposits and similar securities 44 363 45 108 Deferred tax 572 712 Short-term insurance technical assets 2 665 2 250 Working capital assets 34 981 38 974 Trade and other receivables 26 396 28 908 Cash, deposits and similar securities 8 585 10 066 Total assets 308 024 317 908 Equity and liabilities Capital and reserves Share capital and premium 23 23 Treasury shares (3 359) (4 142) Other reserves 9 100 9 312 Retained earnings 21 299 22 458 Shareholders’ fund 27 063 27 651 Minority shareholders’ interest 2 370 2 596 Total equity 29 433 30 247 Long-term policy liabilities 225 111 229 268 Insurance contracts 116 101 120 879 Investment contracts 109 010 108 389 Term finance 6 471 6 763 Margin business 2 882 2 830 Other interest-bearing liabilities 3 589 3 933 External investors in consolidated funds 9 273 9 822 Cell owners’ interest 475 447 Deferred tax 303 440 Short-term insurance technical provisions 8 700 8 229 Working capital liabilities 28 258 32 692 Trade and other payables 25 428 29 325 Provisions 1 541 1 453 Taxation 1 289 1 914 Total equity and liabilities 308 024 317 908

Group Financial Review 57 SANLAM INTERIM RESULTS 2009

R million

Note Reviewed 2009 Reviewed 2008 Net income 15 854 6 572 Financial services income 15 034 13 816 Reinsurance premiums paid (1 765) (1 624) Reinsurance commission received 147 195 Investment income 8 863 8 250 Investment surpluses (6 519) (14 212) Finance cost – margin business (114) (126) Change in fair value of external investors’ liability 208 273 Net insurance and investment contract benefits and claims (7 513) 1 446 Long-term insurance and investment contract benefits (3 219) 5 205 Short-term insurance claims (5 776) (5 107) Reinsurance claims received 1 482 1 348 Expenses (5 383) (5 173) Sales remuneration (2 127) (1 987) Administration costs (3 256) (3 186) Impairments (62) (135) Amortisation of value of business acquired (37) (31) Net operating result 2 859 2 679 Equity-accounted earnings (5) 63 Finance cost – other (164) (160) Profit before tax 2 690 2 582 Taxation (853) (528) Shareholders’ fund (613) (419) Policyholders’ fund (240) (109) Profit from continuing operations 1 837 2 054 Discontinued operations – (63) Profit for the period 1 837 1 991 Other comprehensive income Movement in foreign currency translation reserve (383) 587 Comprehensive income for the period 1 454 2 578 Allocation of comprehensive income Profit for the period 1 837 1 991 Shareholders’ fund 1 606 1 852 Minority shareholders’ interest 231 139 Comprehensive income for the period 1 454 2 578 Shareholders’ fund 1 303 2 313 Minority shareholders’ interest 151 265 Earnings attributable to shareholders of the company (cents) Profit for the year Basic earnings per share 1 81,6 91,4 Diluted earnings per share 1 79,7 89,5 Earnings attributable to shareholders of the company from continuing operations (cents): Profit for the year Basic earnings per share 1 81,6 93,1 Diluted earnings per share 1 79,7 91,2

Statement of comprehensive income

for the six months ended 30 June 2009

58 Group Financial Review SANLAM INTERIM RESULTS 2009

R million

Reviewed 2009 Reviewed 2008 Shareholders’ fund Balance at beginning of the period 27 651 29 334 Comprehensive income 1 303 2 313 Profit for the period 1 606 1 852 Other comprehensive income: movement in foreign currency translation reserve (303) 461 Net movement in treasury shares 633 ( 684) Net realised investment surpluses on treasury shares (146) (159) Cost of net treasury shares disposed/(acquired) (1) 779 (525) Share-based payments 45 49 Dividends paid (2) (1 954) (1 907) Shares cancelled (615) (1 439) Balance at end of the period 27 063 27 666 Minority shareholders’ interest Balance at beginning of the period 2 596 2 220 Comprehensive income 151 265 Profit for the period 231 139 Other comprehensive income: movement in foreign currency translation reserve (80) 126 Net movement in treasury shares 9 69 Net realised investment surpluses on treasury shares (13) 47 Cost of net treasury shares disposed (1) 22 22 Share-based payments 9 7 Dividends paid (279) (245) Acquisitions, disposals and other movements in minority interests (116) 168 Balance at end of the period 2 370 2 484 Shareholders’ fund 27 651 29 334 Minority shareholders’ interest 2 596 2 220 Total equity at beginning of the period 30 247 31 554 Shareholders’ fund 27 063 27 666 Minority shareholders’ interest 2 370 2 484 Total equity at end of the period 29 433 30 150

Comprises movement in cost of shares held by subsidiaries and the share incentive trust.

Dividend of 98 cents per share paid during 2009 (2008: 93 cents per share) in respect of the 2008 financial year.

Statement of changes in equity

for the six months ended 30 June 2009

Group Financial Review 59 SANLAM INTERIM RESULTS 2009

Cash flow statement

for the six months ended 30 June 2009

R million

Reviewed 2009 Reviewed 2008 Cash flow from operating activities 357 5 746 Cash flow from investment activities (2 411) 4 679 Cash flow from financing activities (147) (1 881) Net (decrease)/increase in cash and cash equivalents (2 201) 8 544 Cash, deposits and similar securities at beginning of the period 55 145 51 309 Cash, deposits and similar securities at end of the period 52 944 59 853 Non-current assets classified as held for sale – (915) Cash, deposits and similar securities at end of the period – continuing operations 52 944 58 938 Cash flows relating to discontinued operations Included in the above are the following cash flows from discontinued operations: Cash flow from operating activities – (215) Cash flow from investment activities – 318 Cash flow from financing activities – – Net increase in cash and cash equivalents – 103 Cash, deposits and similar securities at beginning of the period – discontinued

• perations

– 812 Cash, deposits and similar securities at end of the period – discontinued operations – 915

60 Group Financial Review SANLAM INTERIM RESULTS 2009

• 1. Earnings per share

For basic earnings per share the weighted average number of ordinary shares is adjusted for the treasury shares held by

• subsidiaries. Basic earnings per share is calculated by dividing earnings by the adjusted weighted average number of shares

in issue. For diluted earnings per share the weighted average number of ordinary shares is adjusted for the shares not yet issued under the Sanlam Share Incentive Scheme, treasury shares held by subsidiaries and the conversion of deferred

• shares. Diluted earnings per share is calculated by dividing earnings by the adjusted diluted weighted average number of

shares in issue. Refer to page 43 for normalised earnings per share, which is based on the economic earnings attributable to the shareholders’ fund, and should be used when evaluating the Group’s economic performance. Reviewed 2009 Reviewed 2008 cents cents Basic earnings per share: Headline earnings 84,6 96,5 Profit attributable to shareholders’ fund 81,6 91,4 Diluted earnings per share: Headline earnings 82,6 94,5 Profit attributable to shareholders’ fund 79,7 89,5 Basic earnings per share for continuing operations: Profit attributable to shareholders’ fund 81,6 93,1 Diluted earnings per share for continuing operations: Profit attributable to shareholders’ fund 79,7 91,2 R million R million Analysis of earnings: Profit attributable to shareholders’ fund 1 606 1 852 Less: Equity-accounted non-headline earnings – (32) Plus: Impairments 58 135 Impairments 60 135 Minority shareholders’ interest (2) – Headline earnings 1 664 1 955 Headline earnings include re-measurements of investment properties, which are largely attributable to policyholder funds. Analysis of earnings from continuing operations: Profit attributable to shareholders’ fund 1 606 1 852 Discontinued operations – 35 Loss from discontinued operations – 74 Tax on loss from discontinued operations – (11) Minority shareholders’ interest – (28) Profit attributable to shareholders’ fund from continuing operations 1 606 1 887 million million Number of shares: Number of ordinary shares in issue at beginning of period 2 190,1 2 303,6 Less: Weighted number of shares cancelled (20,1) (31,8) Less: Weighted Sanlam shares held by subsidiaries (including policyholders) (202,0) (245,6) Adjusted weighted average number of shares for basic earnings per share 1 968,0 2 026,2 Add: Weighted conversion of deferred shares 20,0 13,1 Add: Total number of shares and options 37,6 43,2 Less: Number of shares (under option) that would have been issued at fair value (10,5) (14,4) Adjusted weighted average number of shares for diluted earnings per share 2 015,1 2 068,1

Notes to the financial statements

for the six months ended 30 June 2009

Group Financial Review 61 SANLAM INTERIM RESULTS 2009

• 2. Reconciliation of segmental information

R million

Reviewed 2009 Reviewed 2008 Segment financial services income (per shareholders’ fund information) 13 808 12 880 Sanlam Personal Finance 3 184 3 090 Sanlam Developing Markets 1 794 1 504 Sanlam UK 182 182 Sanlam Employee Benefits 1 056 1 006 Short-term Insurance 6 415 5 829 Sanlam Investments 928 1 097 Sanlam Capital Markets 162 97 Corporate, consolidation and other 87 75 IFRS adjustments 1 226 936 Total financial services income 15 034 13 816 Segment result (per shareholders’ fund information after tax and minorities) 1 547 1 151 Sanlam Personal Finance 855 (207) Sanlam Developing Markets 46 46 Sanlam UK (41) 70 Sanlam Employee Benefits 194 122 Short-term Insurance 153 33 Sanlam Investments 262 249 Sanlam Capital Markets 59 34 Corporate, consolidation and other 19 804 Reverse minority shareholders’ interest included in segment result 231 139 Fund transfers 59 701 Total profit for the period 1 837 1 991

Additional segmental information is provided in the Shareholders’ fund information (refer pages 30 to 37).

• 3. Pension and Retirement Fund Investigation

Shareholders are referred to the ongoing investigations by the Financial Services Board (FSB) and the National Prosecuting Authorities into alleged fraud within a number of pension and retirement funds. The events in question took place in the mid to late 1990’s. Sanlam acted as administrator for three of these funds at the time and has been supporting the authorities since their investigation started in 2004. Sanlam in 2006 made a payment in good faith to the funds, representing the benefit, plus interest, that Sanlam indirectly received through the sale of a company that previously formed part of the Sanlam group, which was the controlling shareholder of the participating employers of three of the funds. The curator of the funds subsequently issued civil claims against a number of parties, including Sanlam, for the alleged losses suffered by the funds. Sanlam and the curator of the funds are involved in litigation in respect of the merits of his claims against Sanlam. Sanlam was not involved in fraudulent or illegal activities relating to these cases. We are confident that, inter alia through the involvement of the FSB, an amicable resolution to this matter will be reached in due course.

• 4. Contingent Liabilities

Shareholders are referred to the contingent liabilities disclosed in the 2008 annual report. The circumstances surrounding these contingent liabilities remained materially unchanged.

• 5. Subsequent Events

No material facts or circumstances have arisen between the dates of the balance sheet and this report that affect the financial position of the Sanlam Group at 30 June 2009 as reflected in these financial statements.

62 Group Financial Review SANLAM INTERIM RESULTS 2009 Group secretary Johan Bester Registered office 2 Strand Road, Bellville 7530, South Africa Telephone +27 21 947-9111 Fax +27 21 947-3670 Postal address PO Box 1, Sanlamhof 7532, South Africa Registered name: Sanlam Limited (Registration number 1959/001562/06) JSE share code: SLM NSX share code: SLA ISIN number: ZAE000070660 Incorporated in South Africa Transfer secretaries Computershare Investor Services (Proprietary) Limited (Registration number 2004/003647/07) 70 Marshall Street, Johannesburg 2001, South Africa PO Box 61051, Marshalltown 2107, South Africa Tel +27 (0)11 373-0000 Fax +27 (0)11 688-5200 www.sanlam.co.za Directors RC Andersen (Chairman), PT Motsepe (Deputy Chairman), J van Zyl (1) (Group Chief Executive), MMM Bakane-Tuoane, AD Botha, AS du Plessis, FA du Plessis, MV Moosa, JP Möller (1), SA Nkosi, I Plenderleith (2), GE Rudman, RV Simelane, DK Smith, ZB Swanepoel, PL Zim

Administration

Cluster Reviews 1 SANLAM INTERIM RESULTS 2009

RETAIL CLUSTER

Cluster Reviews 3 SANLAM INTERIM RESULTS 2009

Who we are

We provide clients in the middle, affluent and self- employed markets in South Africa and Namibia with a comprehensive range of appropriate and competitive financial services solutions designed to facilitate their long-term wealth creation, protection and niche financing needs. Engineering these solutions around client needs and delivering the solutions through credible financial advice enables us to grow SPF on a sustainable basis, thereby maximising shareholder value while building long-term relationships with our clients. We achieve this through our people – we foster a culture of passion for our clients and place great emphasis on diversity and innovation. At SPF we strive to be an employer of choice. SPF provides the following financial services and advice to clients in the middle, affluent, and self-employed and professional markets: Client protection – Life insurance, short-term insurance and medical cover Providing for retirement Providing for non-retirement savings needs – Endowments, savings accounts and fixed deposits Protecting and growing wealth – Linked investment solutions Managing assets in retirement – Flexible investment-linked annuities – Guaranteed annuities Ensuring transfer of wealth between generations – Estate and trust services Transactional requirements – Debit card Financing and credit needs – Home solutions – Personal loans Our competitive advantage is our established client centric strategy, which is driven by focused market segmentation and diversification of our financial services solutions, as well as our extensive distribution footprint.

Sanlam Personal Finance

4 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Personal Finance

R million 1H09 %∆ Net operating profit 691 2 New business flows – SA recurring 487 (13) – SA single 9 727 (12) – Non-SA 4 486 5 PVNB premiums* 7 488 (7) VNB* 135 (16) Margin* 1,80% vs 1,98% Annualised ROGEV 5,6% * Excludes non-life business

Group Profile and Shareholding Structure

South African operations % Middle market and self-employed focus Sanlam Individual Life division 100 Life insurance Sanlam Home Loans 50 Home loan joint venture with Absa Multi Data 100 Electronic money transfer Sanlam Trust 100 Estate and trust services Sanlam Liquid(1) 100 Debit card and savings facility Anglo African Finance 65 Niche trade and bridge finance Sanlam Health Management 100 Medical scheme services Sanlam Linked Investments 100 Linked product provider Affluent market focus Glacier(2) 100 Financial services for affluent market

Non-South African operations % Sanlam Namibia Holdings (SNH) 54 Financial services in Namibia Sanlam Life Namibia 100 Closed fund business in Namibia

Sanlam Personal Finance

continued

Cluster Reviews 5 SANLAM INTERIM RESULTS 2009

Sanlam Personal Finance

continued

Analysis of Operating Profit (per Profit Source)

June 2009 R million June 2008 R million Admin income 131 147 Risk income 248 194 Market Related income 514 554 Net interest income (working capital & loan business) 216 238 Other 298 316 Operating profit before tax & minorities 892 895 Tax & minorities (201) (217) Operating profit after tax & minorities 691 678 Admin Ratio 35,9% 35,1%

Analysis of Operating Profit (per Business Unit)

June 2009 R million June 2008 R million SA Life 736 736 SA Non-life 107 106 Glacier 60 61 Other 47 45 Non-SA 49 53 Operating profit before tax & minorities 892 895

6 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Personal Finance

continued

Administration Costs (Rm)

Second Half First Half

500 600 700 800 900 1 000 1 100 2002 2003 2004 2005 2006 2007 2008 2009*

961 906 846 882 937 1023 1062 787 818 757 779 808 859 905 897

* Excludes the costs associated with new ventures of R55m (Sanlam Healthcare Management and Sanlam Home Solutions)

Administration Cost Ratio (%)

30% 35% 40% 45% 50%

44,1 42,1 38,4 38,1 36,8 35,6 35,3 34,6

2002 2003 2004 2005 2006 2007 1H2009* 2008

*Admin ratio excludes new ventures (Sanlam Healthcare Management and Sanlam Home Solutions)

Cluster Reviews 7 SANLAM INTERIM RESULTS 2009

Persistency: Number of Lapses, Surrenders & Fully Paid-Up Policies as % of In Force

Second Half First Half

0,0 1,0 2,0 3,0 4,0 5,0

4,2 4,0 3,8 3,7 3,6 4,2 4,8 3,9 3,9 3,6 3,4 3,8 3,9

2003 2004 2005 2006 2007 2008 2009

Second Half First Half

SA Surrender Benefits Paid (Rm)

Second Half First Half

500 1 400 1 600 1 800 2 000 2 200 2 400 2 600

2 419 1 374 1 823 1 668 2 104 1 963 2 213 2 378 1 707 1 367 1 535 1 678 1 790 1 962 1 777

1 200 1 000 2002 2003 2004 2005 2006 2007 2009 2008

Total Benefits Paid (SA)

June 2009 R million June 2008 R million Total life benefits 8 804 9 351 Death & disability benefits 1 015 985 Maturity benefits 4 166 4 757 Life & term annuities 1 762 1 625 Surrenders 1 777 1 962 Other 84 22 Non-life benefits (linked) 3 951 4 440 Total benefits paid 12 755 13 791

Sanlam Personal Finance

continued

8 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Personal Finance

continued

SA Single Premiums (life & non-life) (%) SA Total Premiums (life & non-life) (%)

ABSA Brokers Direct and other Other Brokers Advisor

2004 2005 2006 2007 1H2009 0% 10% 20% 30% 40% 50% 70% 60% 2008

8,0 11,5 8,5 6,0 9,8 3,8 9,4 8,7 9,0 6,9 6,9 6,2 40,0 38,5 41,5 45,4 42,5 51,3 42,6 41,3 41,0 41,7 40,8 38,7 ABSA Brokers Direct and other Other Brokers Advisor

2004 2005 2006 2007 1H2009 0% 10% 20% 30% 40% 50% 70% 60% 2008

8,0 11,6 9,0 6,6 9,6 4,2 8,8 8,2 8,5 6,6 6,6 5,9 39,6 38,0 40,4 44,1 42,0 49,9 43,6 42,2 42,1 42,7 41,8 40,0

SA New Recurring Premiums (%)

ABSA Brokers Direct and other Other Brokers Advisor

0% 10% 20% 30% 40% 50% 70% 2004 2005 2006 2007 1H2009 60%

7.5 11.7 11.9 13.3 7.2 8.6 2.8 3.5 3.6 3.0 3.2 5.3 36.1 32.9 30.5 31.5 36.6 31.2 53.6 51.9 54.0 52.2 53.0 54.9

2008

Cluster Reviews 9 SANLAM INTERIM RESULTS 2009

SA New Business Recurring Premiums (Rm) SA Single Premiums (life vs non-life) (Rm)

200 300 700 2004 2005 2006 2007 2009 2003 600 500 400 2008

430 413 458 523 613 609 417 388 375 422 544 556 487

Second Half First Half

2 000 6 000

Life Non-Life

1 000 3 000 5 000 4 000

1608 2735 2572 3823 4449 5686 5118 3029 3186 2903 3563 3871 5315 4609

1H2004 1H2005 1H2006 1H2007 1H2009 1H2003 1H2008

Sanlam Personal Finance

continued

Cluster Reviews 11 SANLAM INTERIM RESULTS 2009

Who we are

Sanlam Developing Markets (SDM) provides affordable financial services solutions to the entry-level market in South Africa and all market segments in other developing markets where Sanlam has established a presence, namely Botswana, Kenya, Tanzania, Zambia, Ghana and India. In the three years since our launch, the emphasis has been on establishing a diverse mix of operations across the African continent and in India with the aim of ensuring sustainable delivery and growth across the various businesses that make up SDM. Our client-centric approach is aimed at protecting and growing the financial interests of our clients across all our markets by providing superior financial solutions. The success of SDM can largely be ascribed to our approach of partnering with reputable and established

• perations in developing markets where potential for

growth has been identified. Our preference for partnerships rather than outright acquisitions has enabled us to allocate our capital resources and expertise to support these partnerships by strengthening their

• perational base and distribution channels to enable

further growth. Our competitive advantage remains a team that is committed to implement and deliver simple but focused strategies and plans, underpinned by a strong Sanlam brand, distribution network and claims management skills.

Sanlam Developing Markets

12 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Developing Markets

R million 1H09 %∆ Net operating profit 85 9 New business flows* – SA recurring 370 5 – Non-SA 681 24 PVNB premiums 2 814 21 VNB 136 20 Margin 4,83% vs 4,85% Annualised ROGEV 6,4% *Excludes white labels and non-core businesses

Group Profile and Shareholding Structure

South Africa Rest of Africa Other international Sanlam Sky (100%) Botswana Life (54%) Shriram Life India (26%) Channel Life (100%)(i) Pan Africa Life Kenya (50%) Safrican (85%) ELAC Ghana (49%) African Life Tanzania (65%) African Life Zambia (70%) Alfinanz (100%) – Application Service Provider

Actual holding of 99.98% (still a small component of minority interests)

Sanlam Developing Markets

continued

Cluster Reviews 13 SANLAM INTERIM RESULTS 2009

Operating Profit for the Six Months Ended 30 June 2009

Operating profit before tax R million Tax R million Operating profit after tax R million Minorities R million June 2009 Operating profit after tax & minorities R million June 2008 Operating profit after tax & minorities R million RSA 50 (1) 49 (1) 48 34 Africa 97 (19) 78 (36) 42 46 Other International * (5)

• (5)
• (5)

(2) Total 142 (20) 122 (37) 85 78

* Sanlam’s share only

New Business Recurring Premiums for the Six Months Ended 30 June 2009

RSA R million Africa R million * Other International R million June 2009 Total R million June 2008 Total R million Brokers 147 42

• 189

185 Agents 115 123 58 296 229 Bancassurance

• 18
• 18

1 Direct 5 12

• 17

45 Other** 103

• 103

79 Total New business 370 195 58 623 539

* Sanlam’s share only ** Group risk & Group benefits

New Business Single Premiums for the Six Months Ended 30 June 2009

RSA R million Africa R million * Other International R million June 2009 Total R million June 2008 Total R million Brokers 258 33

• 291

162 Agents

• 7

18 25 101 Bancassurance

• 124
• 124

84 Direct

• Other**

7 246

• 253

328 Total New business 265 410 18 693 675

* Sanlam’s share only ** Brokers-Annuity (BIHL) & Group benefits

Sanlam Developing Markets

continued

Cluster Reviews 15 SANLAM INTERIM RESULTS 2009

Who we are

In June last year, Sanlam announced the reorganisation of its interests in the United Kingdom, to be consolidated within a single holding company, Sanlam UK Limited, in 2009 The Sanlam UK cluster therefore consists of subsidiary companies Merchant Investors (100% owned), Principal (90% owned) and Buckles (60% owned). The portfolio is further complemented by Sanlam’s minority holdings in Intrinsic, Nucleus and the Punter Southall Group. The minority interests were previously part of Sanlam Independent Financial Services, which has been phased

• ut as a business unit of the Sanlam Group.

The aim of consolidating our interests in the UK is to ensure the co-ordinated development of our growing portfolio of financial services businesses operating in distribution, product packaging, administration and asset management services. In addition, this initiative will position Sanlam to further develop quality intermediary relationships in a changing retail financial services landscape in the UK. Sanlam UK is about creating a framework that will enable each of our businesses to thrive through the linking of business opportunities, sharing of knowledge and experience, and having access to the necessary capital for growth, as opposed to being an additional operating entity with centralised costs. Our competitive advantage lies in our “newcomer” status – there is no historical conduct that prohibits us from taking a fresh partnering approach to the Independent Financial Adviser (IFA) market in the UK and no material legacy business that could lead to conflicts or vested interests. We also have the potential to move faster than other players to capture and benefit from current and emerging

• pportunities, since we are backed by the Sanlam Group

and its resources and because the basic building blocks are already in place.

Sanlam UK

16 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam UK

continued

Sanlam UK

R million 1H09 %∆ Net operating profit 13 (65) New business flows – Life insurance 451 (44) – Investment 504 – PVNB premiums 463 (45) VNB – – Margin 0,00 % vs 0,36% Annualised ROGEV (14,3%)

Group profile and shareholding structure

Investment Shareholding Description Merchant Investors 100% Bristol-based niche player in the affluent life and specialist pension markets Principal 89% Leading independent investment management company specialising in discretionary portfolio management Buckles 60% Largest independent financial adviser practice based in Wales Nucleus 42,5% Linked investment product platform controlled by independent financial advisers Intrinsic 28% Multi-tied financial intermediary business consisting of financial planning and mortgage advisory divisions Punter Southall Group 26% UK-based financial services advisory group

Cluster Reviews 17 SANLAM INTERIM RESULTS 2009

Key performance measurements – 30 June 2009

Total controlled entities1 Total - associates2 Sanlam UK Total Funds under Management (£bn) 2009 2,3 1,6 3,9 2008 1,6 1,4 3,0 Funds under Administration (£bn) 2009 0,0 0,3 0,3 2008 0,0 0,1 0,1 Number of Advisers 2009 48 1 654 1 702 2008 42 1 502 1 544 Flows

• New business (£m)

2009 70 250 320 2008 54 262 316

• Total (£m)

2009 92 250 342 2008 75 262 337

• Net flows (£m)

2009 (8) 79 71 2008 8 93 101

• VNB (Life Insurance) (£m)

2009 0,0 0,0 0,0 2008 0,3 0,0 0,3 Operating Profit (£m) 2009 1,5 (0,1) (0,4) 1,0 2008 1,7 0,7 2,4

Sanlam UK

continued

19 Cluster Reviews SANLAM INTERIM RESULTS 2009

INSTITUTIONAL CLUSTER

Cluster Reviews 21 SANLAM INTERIM RESULTS 2009

Who we are

Sanlam Investments is one of the core clusters within the Sanlam Group and consists of 15 businesses working collaboratively to offer individual and institutional clients access to a comprehensive range of specialised investment and risk management expertise spanning local and international asset management, private equity, hedge funds, employee benefits, property investments and more. Each business within the Sanlam Investments cluster functions as an entrepreneurial entity with a shared focus

• n delivering leading performance and exceptional client
• service. We achieve this by instilling passionate ownership

as an intrinsic value among our employees. We are based in South Africa, with a strong presence in sub-Saharan Africa and footprints in the United Kingdom, Europe, Australia and India. Our diverse client base includes retirement funds, corporations, financial institutions, individual investors, trade unions, non- governmental organisations, governments and their agencies. Sanlam Investments’ competitive advantage lies in its ability to cultivate a unique entrepreneurial culture within the stability and structures of a big group. For this reason, we are able to attract talented and innovative individuals to establish investment-related businesses within the cluster. Our core value of passionate ownership encourages people to run their business as if it is their own, while we offer support in the form of essential shared services such as finance, HR, IT, marketing, compliance and legal services. Moreover, being within the cluster gives the business access to capital for innovative ideas as well as a ready support network and the advantages of cross-selling.

Sanlam Investments

22 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Investments

R million 1H09 %∆ Net operating profit 264 (8) New business flows – SA: Segregated 7 920 24 – SA: Other 15 580 3 – Non-SA 1 908 28 Net flows 2 590 — FUM (R billion) 403 (1) Annualised ROGEV 8,3 —

Profile of Sanlam Investments

Sanlam Investment Management (SIM) One of the largest investment managers in South Africa as measured by assets under management, SIM manages financial assets for individual, institutional, retail and corporate clients and offers investment strategies in vehicles ranging from collective investments to institutional portfolios. SIM is grouped into six boutiques that share a common research platform. The boutiques are Equities, Fixed Interest, Absolute Return, Liability Driven, Active Quants and Balanced Mandates. Our structure ensures focus, a small-team culture and speedy decision-making so our clients get access to our best thinking at all times. Sanlam Collective Investments (SCI) The third largest manager of collective investment portfolios in South Africa, SCI offers a wide range

• f retail, multi-managed, institutional and third-party collective investment funds.

Sanlam Employee Benefits (SEB) Sanlam Employee Benefits specialises in the provision of risk, investment and fund administration services to institutions and retirement funds. Sanlam Multi Manager International (SMMI) An investment management advisory business, SMMI is dedicated to active multi-management. Sanlam Private Investments (SPI) SPI is a private client portfolio management and stockbroking business, serving high net worth individuals, charitable trusts and smaller institutions. Sanlam Capital Markets (SCM) SCM is a provider of risk management and structured product solutions. SIM Emerging Markets (SIM-EM) A fund and investment management business, SIM-EM focuses on emerging markets, particularly in Africa and Asia. SIM-EM has offices in Namibia, Botswana, Nigeria, Kenya, Zambia and India. Sanlam International Investment Partners (SIIP) SIIP actively seeks to form partnerships with investment teams in developed markets such as the US, UK, Europe and Australasia and to work with them to build businesses which can capably service their unique markets. Sanlam Properties (SP) Sanlam Properties specialises in strategic property services, including portfolio management, development, sales and listings. Sanlam Asset Management – Ireland (SAMI) SAMI is an international investment management business based in Dublin, and manages funds domiciled in Ireland for the Sanlam Group. Sanlam Private Equity (SPE) One of the largest private equity fund managers in South Africa, SPE offers both a direct and fund-of-funds investment programme. SPE also drives the Group’s BEE investment programme. SIM Global SIM Global actively manages long-only international funds from South Africa for local and international clients. Octane A specialist alternative investment provider, focusing on hedge fund-of-funds, Octane is based in Switzerland with offices in South Africa. Octane also incorporates Blue Ink, which specialises in alternative investment strategies. Sanlam Structured Solutions (SSS) SSS offers derivative-based skills to the Investments cluster to enhance returns on portfolios and to improve the product offering to clients, such as derivative, tax and legal-based structured products. Simeka Wholly owned by Sanlam Investments, Simeka is an employee benefits consulting company

• perating independently within the larger Investments cluster.

Sanlam Investments

continued

Cluster Reviews 23 SANLAM INTERIM RESULTS 2009

Income Statement per Division

Total Investment Cluster Total South African

• peration

Total Rest of Africa

• peration

Total International

• peration

R million Jun 2009 Jun 2008 Jun 2009 Jun 2008 Jun 2009 Jun 2008 Jun 2009 Jun 2008 Income 915 1 071 704 782 61 81 150 208 Operating expenses (422) (517) (313) (371) (42) (42) (67) (104) Asset Management and distribution fees paid (134) (159) (130) (152)

• (4)

(7) Profit before tax & performance fees 359 395 261 259 19 39 79 97 Net performance fees 11 26 3 23

• 8

3 Profit before tax 370 421 264 282 19 39 87 100 Tax and minorities (106) (134) (73) (79) (16) (26) (17) (29) Operating profit after tax 264 287 191 203 3 13 70 71 Assets under management (R’ billion) 403 437 343 354 25 27 35 56

Split in Assets Under Management (Rbn)

June 2009 June 2008 December 2008 Wholesale 321,3 345,3 324,7

• Sanlam (SA assets)

165,6 168,8 161,1

• Sanlam (International assets)

31,6 49,1 37,3

• Segregated *

108,0 112,0 111,4

• Sanlam Properties

4,5 4,1 4,0

• Sanlam Collective Investments

11,6 11,3 10,9 Retail 81,5 92,2 84,0

• Sanlam Private Investments

34,4 44,3 37,6

• Sanlam Collective Investments

39,7 39,6 38,5

• Sanlam Multi Manager (Glacier) **

7,4 8,3 7,9 Total AUM (Consolidated) 402,8 437,5 408,7`

* The assets of SIM Emerging Markets are included in this number. ** The rest of Sanlam Multi Manager assets are included in Sanlam and Segregated assets.

Sanlam Investments

continued

24 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Investments

continued

Split of Operating Profit before Tax (South Africa and International) – 6 month periods ending 30 June Net Fund Flows (Rbn) – excluding White Labels

0% 20% 40% 60% 80% 100% 1H2003 1H2005 1H2006 1H2007

International SA

1H2004 1H2009

16 27 32 47 33 28 100 84 73 68 53 67 72

1H2008 4 6 8 2

0,3 5,4 6,6 6,7 4,5 5,3 3,1 3,1

2003 2004 2005 2006 2007 H12009 H12008 2008

Note: 2005 excludes PIC outflows of R6.0bn 2006 excludes PIC outflows of R21.6bn

Cluster Reviews 25 SANLAM INTERIM RESULTS 2009

Who we are

Sanlam Employee Benefits (SEB) forms part of the Sanlam Investments cluster and specialises in the provision of risk and investment solutions as well as administration services to institutions and retirement funds. As a result of significant restructuring in 2007, SEB now consists of four entrepreneurial divisions: Sanlam Group Risk, Sanlam Structured Solutions, Sanlam Umbrella Solutions and Coris Capital, our retirement fund administration platform. Our underlying philosophy is to be driven by the needs of

• ur clients. We therefore dedicate our time and resources

to creating employee benefit solutions that respond to our clients’ needs on all levels. As such we are also a leading provider of retirement fund membership information via state-of-the-art systems. Our vision is to be the leader in client-centric wealth creation and protection by ensuring that retirement fund members realise their life-long goal: having sufficient resources enabling them to enjoy their retirement. We offer our clients institutional investment products (market-linked investments and smoothed bonus portfolios), group life benefits, group disability benefits, cell insurance schemes, retirement fund administration, annuity solutions and an umbrella fund offering. The SEB brand is associated with well-established and highly rated retirement fund research. Our research findings are presented annually at the SEB Benchmark Symposium and are sought after by pension fund trustees, principal officers, consultants as well as competitors. This market research enables us to identify key trends in the retirement fund industry, making it possible for us to link our solutions closely to client needs.

Sanlam Employee Benefits

26 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Employee Benefits

continued

Sanlam Employee Benefits

R million 1H09 %∆ Net operating profit 65 (22) New business flows – SA recurring 76 (7) – SA single 66 (65) PVNB premiums 704 (21) VNB 5 (64) Margin 0,71% vs 1,58% Annualised ROGEV 6,8%

Group profile and shareholding structure

Investment Shareholding Description Sanlam Employee Benefits (SEB) 100 Retirement fund business Sanlam Umbrella Fund Administrators (SUFA) 100 Umbrella fund administration (SME focus) Sanlam Customised Insurance Limited (SCIL) 100 Cell captive insurer Infinit Group Solutions 50,1 Distribution of diversified Group risk products Coris Capital 62 Retirement fund administration on

• utsourced basis

Analysis of Operating Profit

June 2009 R million June 2008 R million Underwriting risk 75 68 Investment & other 57 74 Administration (40) (25) Operating profit 92 117

Cluster Reviews 27 SANLAM INTERIM RESULTS 2009

Who we are

Sanlam Capital Markets (SCM) forms part of the Sanlam Institutional Cluster and is a financial engineering business that provides solutions for its clients through the use of debt, equity and derivative instruments, and exploits specific synergies within other businesses in the Sanlam Group. Sanlam Capital Markets consists of the following business units: Debt Structuring – debt origination, structuring and portfolio management. Equities – structured equity transactions, equity trading, underwriting and stockbroking. Market Activity – trading and structuring of equity and interest rate derivative products and funding of SCM. At SCM, people are the driving force of the business, applying their skill and experience to design optimal solutions for SCM’s clients while appropriately managing the financial risks resulting from these transactions.

Sanlam Capital Markets

28 Cluster Reviews SANLAM INTERIM RESULTS 2009

Sanlam Capital Markets

R million 1H09 %∆ Net operating profit 59 74 Total revenue 162 67 Cost to income ratio 62% vs 100% Capital 450 13 Annualised ROGEV 28,4%

Analysis of Operating Profit

June 2009 R million June 2008 R million Total revenue 162 97 Capital 16 20 Equities 104 84 Debt 46 28 Market Activity (4) (35) Total expenses (101) (97) Income before taxation 61 Taxation (2) 34 Attributable income 59 34 Capital 450 400 Return on Equity 28,4% 17,7%

Sanlam Capital Markets

continued

29 Cluster Reviews SANLAM INTERIM RESULTS 2009

SHORT-TERM INSURANCE CLUSTER

Cluster Reviews 31 SANLAM INTERIM RESULTS 2009

Who we are

Santam is the largest short-term insurer in South Africa with a market share exceeding 20% and a client list that includes the majority of the top 100 companies listed on the JSE Limited. Santam is a well diversified group, providing insurance cover on all classes of short-term insurance. On a segmented basis, Santam’s business is made up of the following segments: Personal Lines 39% Commercial Lines 47% Alternative risk 14% Following a successful 2008, Santam’s operational excellence was again recognized by being voted the “Best Personal, Commercial and Corporate Insurer of 2009” by the Financial Intermediaries’ Association (FIA).

Santam Limited

32 Cluster Reviews SANLAM INTERIM RESULTS 2009

Santam Limited

continued

Santam

R million 1H09 %∆ Net operating profit* 118 (37) Gross written premium 7 291 7 New earned premiums 6 179 9 – Net claims ratio 72,9% – Net acquisition ratio 25,6% – Underwriting ratio 1,5% Regulatory solvency 42% Annualised ROGEV 22,1% *Contribution to Sanlam’s net operating profit

Business Profile

Insurance classes % contribution to gross written premium Motor 40 Property 28 Alternative risk 14 Liability 7 Engineering 4 Transportation 3 Accident and health 3 Crop 1 Miscellaneous <1 Guarantee <1

Key Results

R million June 2009 June 2008 %∆ Gross written premium* 7 291 6 801 7 Underwriting result* 88 326 (73) Investment return on insurance funds* 217 129 68 Net insurance result* 311 462 (33) *Continuing operations only

Cluster Reviews 33 SANLAM INTERIM RESULTS 2009

Net operating profit for the six months ended 30 June 2009

2009 2008

%∆

Net earned premiums 6 179 5 694 9 Interest on working capital 217 129 68 Financial services income 6 396 5 823 10 Sales remuneration (940) (818) 15 Income after sales remuneration 5 456 5 005 9 Underwriting policy benefits (4 503) (3 936) 14 Administration costs (642) (607) 6 Result from financial services before tax 311 462 (33) Tax on result from financial services (90) (109) (17) Result from financial services after tax 221 353 (37) Minority shareholders’ interest (103) (165) (38) Net result from financial services 118 188 (37)

Key Ratios

June 2009 June 2008 Ratios % % Net claims ratio 72,9 69,2 Net acquisition cost ratio 25,6 25,1 Net underwriting ratio 1,5 5,7 Net insurance result margin on net earned premium 5,0 8,1 Solvency Net asset value (NAV) Rm 4 266 3 970 NAV per share cps 3 525 3 525 Net written premium** Rm 12 229 11 307 Regulatory solvency % 42 40

Santam Limited

continued

34 Cluster Reviews SANLAM INTERIM RESULTS 2009

Motor Property Alternative Risk Liability Engineering Crop Transportation Accident and health Miscellaneous Guarantee

(400) (200) (100) 100 200 300

Guarantee Miscellaneous Crop Transportation Accident & health Engineering Liability Motor

(300)

ART Property

June 2008 June 2009

Santam Limited

continued

GWP per Insurance Class (%) – Continuing activities only Underwriting Surplus per Insurance Class (Rm) – Continuing activities only