Sanlam Limited (LA6S.F) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is [indiscernible], and I am here of Investor Relations. Thank you all for joining us on this call. Before we begin, let me just outline a few logistics. During the presentations, the presenters will be on screen. [Operator Instructions]. And with that, I'll now hand over to Paul Hanratty.

Thank you very much, and good afternoon, ladies and gentlemen. Thank you very much for joining us on this call. Can I start by just wishing you all the very best for 2026. I think -- I hope it's a great year for all of you and it's a great year for markets as well. We're clearly doing this call at a rather hard time given that we made some announcements in December, but with the holidays, and you could see that even the IT today we have trouble starting it up on time. I'm joined today by our Group Finance Director, Abigail Mukhuba; the Group Executive for Strategy, M&A in Asia, David Marshall; and our Chief Actuary and Chief Risk Officer, Mlondolozi Mahlangeni. Before we dive into the details, I will start by outlining the announcement that we made in December and Abigail will then take you through some of the more specific details and the implications of these transactions. So in December, we announced some significant developments in our India portfolio. Mitsubishi Financial Group have injected or are planning to inject capital into Shriram Finance Limited acquiring a 20% stake. We've also made progress on our insurance transactions in India, increasing our stakes in the Shriram general insurance company and Shriram Life Insurance Company and we've also announced the acquisition by Sanlam of Piramal shareholding in Shriram Life. We believe that these transactions, which are all subject to the relevant approval processes, will accelerate Sanlam's strategy in India, strengthen our ecosystem across credit, insurance, wealth and asset management and unlock further growth and, therefore, long-term value for shareholders. India has long been a core growth market for Sanlam, and these actions reinforms our commitment to building a leading position in one of the world's most dynamic financial services environment. Let me start with the most significant development, which is the proposed capital injection into Shriram Finance by MUFG. Shriram Finance has a compelling growth opportunity, but we've known for a long time that to realize this, the business requires substantial capital over the medium to long term. In MUFG, Shriram Finance will have one of the world's largest diversified financial institutions as an investor. MUFG has a market capitalization of USD 170 billion and it operates in more than 50 countries. MUFG will be joining the Shriram Finance shareholder base as a minority investor with a 20% stake, resulting in a capital injection into Shriram Finance of approximately USD 4.4 billion. The transaction will proceed following the approval by Shriram Finance shareholders at an extraordinary general meeting on the 14th of January and is subject to the customary regulatory clearances. This injection is expected to improve Shriram Finance's credit rating and thereby reduce the cost of funding its loan book over time, ultimately raising profitability for Shriram Finance. While the initial capital injection will reduce free run finance's return on equity, we're confident that over time, the higher profitability and the faster growth that will be enabled through this additional capital injection will create significant shareholder value. Following the transaction, Sanlam will hold an effective direct holding of approximately 7.6%, down from the 9.5% due to the dilution impact of MUFG subscription. The Shriram ownership trust will hold 12.7%. That's after dilution. So together, Sanlam and Shriram remains the promoters of Shriram Finance retaining strategic influence of the Shriram ecosystem. Our expectation is that faster growth in Shriram Finance will positively impact our insurance businesses, which will benefit from the cross-sell opportunities into the Shriram Finance client base. Furthermore, Sanlam and Shriram have, on an in-principle basis agreed to pursue a restructuring that would separate the lending and credit business from the other interests within Shriram Capital. This agreement, which has the full support of MUFG will enable both Sanlam and the Shriram ownership trust to hold their states directly in Shriram Finance. This marks a significant step forward in simplifying our ownership structure and strengthening strategic alignment across the group. If I talk about the Shriram Finance share price performance over 2025, it's been an exceptional year for the stock price. It was pretty stagnant for the first half of the year. But it started the year at INR 583 and by December, the share price has surged to INR 996. I believe this increase in share price reflects the broader market for you on the value created through the capital injection that we've spoken about. Turning now to our insurance businesses. You will recall that as far back as April 2024, we announced the acquisition of additional interest in Shriram General Insurance Company and Shriram Life Insurance company from the private equity firm TPG and from the Shriram ownership trust, both of those, of course, subject to regulatory approvals. I'm pleased to report that the insurance regulatory and development authority of India has now withdrawn its appeal regarding the proposed transaction structure. So we now expect the transactions to be reviewed and anticipate regulatory approval in due course. Completion is expected in the first quarter of this year, after which Sanlam will hold an effective economic stake of over 50% in each of the insurers, further strengthening our strategic influence across our Indian insurance platform. Alongside these developments, we have just recently signed a share purchase agreement with Piramal to acquire its 14.7% interest in Shriram Life Insurance Company on terms consistent with the insurance transactions that we did with TPG and the Shriram Ownership Trust. This will increase Sanlam's effective economic interest in the Life company in India to around 68%. This investment strengthens our position in India's fast-growing insurance market and advances our long-term objective of a simplified ownership structure. It enables us to drive growth, operational excellence and ecosystem integration while maintaining Shriram as a strong local partner supporting on-the-ground execution. Both the insurance transactions and the Piramal transaction remains subject to the required regulatory approvals, and they will be funded from Sanlam's discretionary capital. At this point, I'm going to hand over to Abigail who will take you through a bit more of the detail around the financial aspects of the transaction and the implications of these for our financial results. Abi, let me hand over to you.

Thank you, Paul, and good afternoon, everyone. As Paul mentioned, we expect this transition to become effective in 2026, subject to the relevant approvals. Therefore, the pro forma financial effects that we present today are for illustrative purposes only. Collectively, the transactions are expected to result in a small net short-term negative group earnings impact, primarily because of the dilution in the shareholding in SSL. However, as SSL, our insurance, wealth and asset management businesses grow more profitable. We anticipate this impact to reverse ultimately supporting sustained value creation for shareholders. In the initial years, return on equity for impact on Sanlam will remain broadly unchanged for the insurance transaction while the initial MUFG transaction has a modest short-term dilutive effect on ROE, this is also due to the reduced shareholding. This does not factor in the anticipated earnings uplift from MUFG's capital injection into the future, which is expected to drive higher profitability and growth over time. We anticipate a modest initial reduction in RoGEV of just below 1% from the insurance transactions from acquiring these stakes at premium to GEV. However, we also expect annual increases of around 0.3% in RoGEV going forward, all else equal, reflecting the benefits of our increased shareholding in the insurance entities as well as the impact of the higher profitability and growth across the ecosystem. The MUFG transaction is expected to have a RoGEV uplift of more than 1%, driven by a revised growth outlook in future years. Overall, these developments position us for sustained positive RoGEV growth into the future. We do not expect a material impact on short-term dividend flows from the Shriram entities. These flows are anticipated to remain broadly in line with the historic patterns in the near term. As a result, the group payout ratio for Sanlam is expected to hold steady. The discretionary capital outflow for the insurance and Piramal transactions is about 5.4 billion with no outflow from Sanlam for the MUFG transaction. And then of the 5.4 billion, 1.1 billion relates to the Piramal transaction and the rest relates to all the other transactions, insurance transactions that we had previously announced. The MUFG transaction has no material impact on the group solvency position and the combined impact of all the transactions results in a decrease in solvency cover of just over 7%. Mainly from the insurance and Piramal transactions, but we remain well within our 150 to 190 target range. So in summary, while there may be some short-term pressure on operating profit as we invest for scale in the short term. We remain confident that these actions will drive long-term growth, profitability and increased dividend capacity for Sanlam in the long term. In terms of the valuation, the transaction valuation for the increased insurance take is about Sanlam's published GEV, which is to be expected given our conservative methodology and the strategic value of these assets. For the Piramal transaction, SLIC has been valued at 2x embedded value, which is in line with market mediums for listed Indian private life insurers. SLICs fundamentals, which include its exceptional growth, unique rural footprint and strong competitive moat fully justify this premium. It's also worth noting that the implied valuations remain below market comparables and precedent transactions, which supports the fairness and upside potential of these transactions. Although we are not yet a market leader in this region, we have successfully carved a niche by creating -- by catering rather to a large population of lower income earners in India, particularly in underserved parts of the country through our partnership with Shriram. The insurance businesses are growing rapidly and are expected to continue their strong growth trajectory over the medium term. The MUFG transaction is expected to increase the SFL growth rates and profitability. So the SFL GEV should increase over time, surpassing our previous projections. Furthermore, faster growth at SFL is expected to translate into faster growth in the insurance entities as well, supporting future growth in their GEVs. From an accounting perspective, the Piramal transaction will increase Sanlam's direct shareholding in SLIC from just below 35% to just over 49% with Sanlam's effective shareholding in SLIC rising from 53.7% to 68.4%. Although the effective holding currently stands at 53.7%, for SLIC is still equity accounted and this is because despite our significant shareholding, Sanlam does not have the rights and control necessary to direct operational decisions at this entity level from an accounting perspective. However, following the Piramal transaction, Sanlam will control -- will have control of SLIC. As such, SLIC will be consolidated into our financial statements incorporating its assets, liabilities, revenue and expenses. The accounting treatment of the general insurance businesses remains unchanged. Despite Sanlam's effective 50.9 shareholdings, SGIC will continue to be equity accounted as Sanlam's ability to control key decision-making continues to be limited. The promoter group remains Sanlam and Shriram Ownership trust, reinforcing our long-standing partnership and strategic alignment. Looking ahead, the insurance transactions and acquisitions of Piramal shareholding in SLIC are targeted for completion still in this first quarter of 2026, subject to regulatory approvals. We will continue to update the market as the milestones are achieved. These transactions depend Sanlam's involvement in the insurance businesses, supporting both growth and operational excellence. Importantly, we maintained Shriram as a strong local partner, ensuring effective underground execution. We believe that the combination of MUFG's capital investment at SFL and the establishment of a strategic position in Indian insurance represents for Sanlam in immediate and significant value unlock for our shareholders as well. Thank you for your continued support. We will open up for questions now.

Thank you, Abigail. Operator of the Chorus Call, are there any questions on Chorus Call?

Thank you. At this stage, we have no questions from the telephone lines.

With that, we'll just go to the webcast. We've got a couple of questions here from Michael Christelis from UBS. His first is just whether there will be an opportunity to purchase Piramal stake in SGI?

So Michael, I'll make a few comments, and then David can add to it. So yes, I think an option does remain to purchase the GI stake. I guess it's probably for us a question of valuation and whether that makes sense or not. The Life one definitely made sense to us at these levels. I don't know, David, if you want to add anything.

And maybe I should just say it's something we'll review in the coming months.

Thank you, Paul. And then I'll just read the next 2. There's another 4, but I'll read the next 2 together. The first still from Michael Christelis is what are the impacts of these transactions on your medium-term targets of earnings growth of South Africa CPI plus 1 for the Indian operations? And then the second is whether there will be any accounting impact in the NAV of Shriram Finance Holdings on the Sanlam balance sheet and therefore, ROE?

Abi, these sound like questions for you.

Thanks, Paul. Michael, in terms of the impact on the medium targets, we -- the targets remain the target, and we continue to aim to achieve performance that needs target. As I said, the financial effect that we're presenting the slight initial reductions. But in the long run, we expect that we're going to see positive impact from an earnings perspective. Obviously, it's also dependent on what time of the year or where in the actual transaction happens, but obviously assuming that it happens in the first quarter as we have assumed. We expect that there should be a slight pressure on the contribution from India. But overall target, I still expect that at a group level, we should be able to meet our targets.

Abigail, before you go on to the second part, let me just point out that a 20% injection of capital is massive. Clearly, what you've got is the capital is not only going to be earning a cash return. On the other end, you've got growth, but to actually practically get the growth up to deploy that quantum of capital is going to take quite a number of years, in my opinion. So when Abigail talks about higher growth in future years and then you come back to a target. I personally don't think it's going to in the next 2 to 3 years, make a meaningful impact on that earnings growth. But obviously, you've seen the share price react because you've got the present value effect coming through. So I guess that's where there's a distinction between what you see happening in the share price and maybe what's going to happen year-by-year. And even the cost of funding, which you could say, well, look at the credit rating improves because you've got this big kicker in capital. Actually, even the funding rate, you've got to roll off the old funding and replace it with new. So it doesn't the change is you'll understand this takes a little bit longer. It's not instantaneous. But there we go, and you go to the second part of the question.

Thanks, Paul. In terms of the accounting impact of SSL on net asset value, Michael, obviously, we've seen the share price even run, as Paul alluded to in the earlier slide. But for a larger part of the 2025 financial year, if you follow our valuation rules, we generally use a web -- a 12-month VWAP to do valuation for SFL. You know that we hold SFL directly, a small stake in another stake indirectly and a larger part of that indirect stake is we apply this 12 months, we went into that valuation. We do expect that there will be an impact, but the impact in the 2020 -- in the immediate year should not be that much, given that the rally in the share price only happened in the latter part of the year. But we do expect that in 2026, all else the JV will follow suit in terms of the increase in the share price. So that should start to carry through in that valuation as well. And Paul, we are open if you want to add anything.

No. Abigail, I think there's 2 points. One is using a 12-month when the share price has done something like that, obviously, by definition, unless the share price falls right back, you're going to have some of that coming through in the late year. That's a GEV question. The second issue is it's currently structured within -- it's a privately held asset for the most part. If we are successful in restructuring, then that will call for Mlondolozi review his valuation methodology. And then it strikes me that it'd be very hard to argue why you wouldn't value SFL at a market price. It's a highly liquid stock with a very big market cap. I think Michael's question was more related to NAV because obviously, what you've done is you've boosted the NAV of SFL. And I guess Michael was probably alluding to a solvency impact. So I had this discussion earlier with Mlondolozi, if you use common sense, you've got a much less risky asset you're holding out because it's got a very big pile of capital. So it would -- you'd expect this transaction to positively impact your solvency because you've now got a much bigger NAV sitting there. But again, because of the way it's held in an analyst structure, we haven't reviewed how we've dealt with the insolvency talk.

Paul. You spoke about valuation, the GP valuation and Michael's next question was whether there will be a change in the JV valuation methodology for the listed insurance finance business either now or after the restructure from DCF to market valuation. And while I just finished closing off Michael's questions, his last one was just whether he asked us to talk a bit about why SLIC has performed so fully in recent years from a financial earnings perspective.

Yes. I think on the last one, it would be good to get David to comment because it's a regulatory issue take on now? Yes, you go.

Yes, Michael, thanks for the question. So there have indeed been 2 major kind of regulatory changes in 2025 that affected all the licensures and particularly SLIC one of them. So the first was the special surrender valuations, which had which had a greater effect on SLIC and some other life insurers because it operates in this rural segment and persistency is a bit lower, although the team are making good progress in terms of lifting that persistency. But what those SSP regulations did was change the profit profile of those products. So it required an entire redesign of the product mix and distribution in that business which was successfully done. So that was the early part of 2025. That was successfully done, and we were expecting return to typical profitability levels within kind of 18 to 24 months from that point. And then the second regulatory change came, which was industry-wide, and that was a redesign of the general sales tax rules in India quite late last year. I think we spoke about this in CMD. And that had -- that had the effect that the input credits on businesses like a life insurance business, it was not clear that those could be claimed. So that is the effect of dampening profit across the whole insurance industry. Again, that is expected to be addressed and to normalize in the future. But for those 2 reasons, principally, I think the third reason which we shouldn't lose sight of is that the business has been investing aggressively into new distribution channels. So there has been investment into those as well, which would have also dampened profit even in the absence of these 2 kind of big regulatory shifts I spoke to. So we remain very optimistic about the longer-term profitability of this business on a forward-looking view. The fundamentals remain exactly as they've always been. But those are the specific reasons why 2025 has not been good, and we are back in the -- when I say not being good, not being good at the bottom line level. But at a top line level, the business continues to excel.

Thank you. Paul, did you want to touch on the JV methodology or ...

No. Look, I mean I think I did say something about it. Mlondolozi wants to -- I mean we I think it's fair to say we haven't made any decisions, but it's, to me, obvious. Mlondolozi, do you want to add anything or say that it's not obvious, and I'm wrong?

No, no, Paul, I would not like to add anything. I think you could comment there.

The next question is from Rob Wydenbach from Wellington. And his question is whether there is a plan still to eventually IPO the insurance companies as the regulator was looking for in Indian life companies? Or does this transaction mean that it's no longer required?

Yes. Look, Rob, nice to hear from you. Look, David may have a different view. And I know in the early days, there was quite a big push amongst policymakers in India to get these companies listed. But I don't believe that there's any pressure on that. I personally am not massively keen on ever IPO-ing them. I mean but that view can change. I don't know what we would benefit from the IPO of them because we wouldn't be looking ourselves to exit in any way. So you'll have to find some other people to sell their stock into or, I suppose, you could list by you could list it, I suppose, without raising capital getting anyone to sell, but it'd be a little bit tricky. So I don't think there's any pressure on us. I guess the only thing that an IPO would do is it would reveal value in a certain sense. But maybe to sort of cut to the chase, which is I'm guessing where you're going, we don't have any plans to think about an IPO. There may be some pressure now the within the GI business ultimately because the shareholders are in there and who want to exit, they may see that as they're only result. But David, I don't know if you want to add anything?

I think that covers it well. So there's no requirement to list either of them. The life insurance business all unlike -- well, that's not going to happen for sure, the GI business, as Paul says, I think it's linked to Michael's earlier question. There are at least 2 kind of private equity type investors in there that will be looking for an exit. So not for regulatory reasons, but for exit reasons, there will no doubt be sort of some noise and pressure around potential to list the GI business if it exits required. If, for example, we went to consider any further acquisition ourselves. As Paul said, that will keep under review. So I think the situation will be a little bit sled. Certainly, the GI business is one that could be listed in terms of its current size. But the life insurance business, I would see that as definitely off certain.

And there's also talk about a regulatory change in India, which would allow you to combine lines and in my mind, the life was if you were really planning to you'd have to do it together with the other one because it's too small to IPO by itself. But I mean we like digging into more detail that rather than you on to line.

And the next question is from Gabriel Sacks from Aberdeen and he asks how should we, how should they think about the contribution of India to overall results or operating profit? And how will the Board of Shriram finance change, if at all, with the simplification of the structure without Shriram Capital.

David, do you want to take that?

Sure. So if I understood the question, I think in terms of the contribution of India to in Sanlam Life, we should expect, over time, subject to the points I made about the J-curve on the Life business, but we should expect a greater contribution from the insurance businesses. And in the short term, we should expect a bit of a dip from the credit side of things because we will be diluted when this capital comes in. We -- all else being equal, we shouldn't be value dilutive because it's a pretty many post-money equation. But the reality, as Paul has spoken to is that capital will take a while to be fully deployed into new growth vectors. And in that initial period ROE and relative profit will drop a bit. And so when we move to 7.6% holding in that the profit hasn't really come through yet. There will be a bit of a dip. So in the short term, I would say a bit less from credit. But in the longer term, I would see I guess, a similar profile to what we see today because we do see SFR continuing to grow fast, in fact, faster as a result of this growth capital. I think the business can press on into greater top line growth than it's done today and some new business lines, and we expect the insurance businesses to continue to grow fast. So probably a fairly similar profile with all of the businesses in the medium term, growing profitability fast.

Thank you, David. The next question is from Matthew. Two questions from Matthew Pouncett from Laurium Capital/His first is whether it's necessary to retain our stake in turn Finance and should they consider this holding as called. And the second is around KKR and whether they still hold a stack in SCI. And with that stake potentially if whether that stake is potentially up for sale in the short to medium term.

Yes. So look, I mean, I'm happy to make a few comments, but David, we'll be able to add to this. So the question is let's start with SSL, do we have to continue to hold it. So I think I'm right, David, in saying that in terms of the agreements that we have signed, we cannot dispose of that state for a period of years. That's one of the conditions of MUFG coming in. But more importantly, right now, together with the Shriram Ownership Trust, we remain as promoters, which basically means that we together control how the ecosystem works, the use of brand, cross-sell and so on across the group. So it remains important for us to be invested there. I also think that we're still fairly bullish, although the share prices run, we are fairly bullish that, that thing could run a bit more. So that you probably wouldn't dispose of it anyway. But I guess, in the longer run, it will remain a question about whether you need it. we feel that it probably will remain important to remain a key, an important shareholder, albeit not someone with a major stake. When we do the restructuring, although we won't be locked into an unlisted vehicle with Shriram ownership trust, we will obviously establish an agreement. A voting pool agreement between ourselves and sure Ownership Trust to retain the promoter status. And on the subject of KKR, yes, Piramal and KKR are the 2 parties that David was alluding to that are looking for an exit at some point of the GI business. And so their stake potentially is for sale.

Thank you. And the next question is from [ Kokkie Kooyman at Denker Capital]. And his question is whether the capital infusion is equal to or by 14% of shares of the capital infusion is equal to about 14% of Shriram's loan book. Does risks -- does this potentially result in these putting pressure on management to go out and lend?

Yes. So look, I don't -- David can probably do a call quickly in his head about what percentage of the loan book it is. And I think it is a valid question. If you're sitting on in effect lately or undeployed capital, do you just sort of hit the accelerator. We've obviously had very extensive discussions with management in Chennai around what are the growth plans. They believe that there are -- there's 1 big product line, which is very at the moment, constrained from their side that they can allow to grow. I think just practically, it's not just about throwing capital at the problem. I think it's -- you can only grow at a certain rate based on your operational capabilities because you need to be able to. Yes, there's a practical aspect to giving loans out because remember, all their loans are asset finance loans. This is not unsecured lending, as you know South African unsecured lending kind of model. It's all asset based. And so just practically, I think there's a very real physical constraint to how quickly it can grow. But I would say this, I don't think that the new investors are massively big risk takers. So I don't -- and it's real patient capital. So I don't think that in practice, there's going to be any great hurry to get it up. And I think one of the things we're going to have to manage over the next 2 or 3 years is, in fact, the deployment of capital. Is it happening fast enough? Is it happening too quickly? Is the risk appetite still fine. The one question, David, you did not answer that somebody did ask a minute or 2 of those, how would the Board structure change at SFL. We will retain our one seat on that board but MUFG, David, 2 seats, I think.

Yes. 2 seats provided they are fall away right if they stay were to get down the go down to one seat and eventually 0, but at 20%, they have 2 seats.

And then obviously, as a promoter group, together with the ownership trust, we work very closely to make sure that the business is well managed. So cookie will keep an eye on things.

Maybe just to add, Paul, if I may, [ Kokkie ] is right, it is about 14% book. And I mean just additional context, you're probably aware of this, [ Kokkie ], but Shriram Finance has grown traditionally a lot top line a lot lower than some of its closest peers. And a lot of that has been fairly deliberate. So there's a lot of scope to grow somewhat faster without being responsible about it. I can just leave it at that. Yes.

Maybe that's a good way of putting it. I mean I don't know if we should give any details, but don't think about a doubling of loan sales. It's -- what they're trying to do is increase the rate of growth. So typically, as David said, they've grown around 14%, 15%, 16% per annum. Some of their competitors are growing at 22%, 23% per annum consistently. So it's to close that delta in growth road rate that we're talking about. And I think that's okay.

Thank you, David, Paul. The next question was speaking about the new investor Tracy Brodziak from Coronation has with MUFG is only interested in turn Finance? Or would they be interested in taking a stake in the insurance asset management operations over time?

Yes. They've been very clear that they are only interested in the lending business. And that's why it's very important for us to make sure that we retain our role as promoters so that we can continue to make sure that there's attention paid to cross-sell because all you focus on is selling credit and not doing any of the cross-sell that obviously could be damaging to us. But that's the current stance and it's their stance in other markets as well. But that goes without saying good change at some point in the future.

And then Faizan Lakhani from HSBC asks, how do the transactions may be up with your floor target with a floor target of more than 20% ROE by 2025, especially with the huge injection and that will take time to be deployed?

Yes. So remember, not to want to teach all dogs new tricks. But the capital injection pulls SFL's ROE down, but soon ROE is something different, right? So we haven't put the 20% and USG have put it in. So it's only to the extent that we get some dilution because of the capital being lazy. And I think in the Sanlam scheme things, it's a relatively small impact. And over time, of course, faster growth, lower cost of funding means it's going to actually help you to achieve the target more easily. So maybe in the short term, there's slight downward pressure. In the long run, there's massive upwind assistance to that.

And then finally, on the webcast is a question from Thapelo Mokonyane from Investec. And his question is what the rationale is for Piramal selling their stake and does the Shriram family have a stake in the insurance companies as well like they do in SFL?

Sorry, I -- why don't you just read the question the last part and ...

Shriram family had a stake in the insurance businesses as well like they do in SSR.

So there is no Shriram Family, to be clear. It's a company with management in an ownership trust. And yes, they have a much bigger stake in the insurance companies than they do in the finance company. And as to perms, reasons for exiting. David, I'm not sure it's never good to comment on our third-party's motivation. But I think it's well known that they -- and they've wanted to exit for a long time. And it has to do with the other interests and a lot to have interest in more than one insurance group, and they have interests elsewhere. But David, is there anything you want to add to that?

No, that's accurate, Paul. But just to add, so if you look at Shriram Life, almost all of the remaining shares. So other than the 68% that we own are owned ultimately by team ownership trust. So they remain very much invested in both insurance companies and very much aligned across all 3 of the big businesses, the insurers and SFL to drive the ecosystem. They're highly aligned economically.

Thank you, David. And I think that concludes the webcast questions. I'm just going to go back to Chorus Call to check if there's any questions there.

We do have a couple of questions. First one coming from Baron Nkomo of JPMorgan.

Can you just maybe comment on your strategic priorities for Tom Life and GM General following the increase in your shareholdings? And maybe just comment on the progress of the wealth management business as well.

David, do you want to cover this?

Sure. Thanks, Baron. Look, our strategic priorities for the 2 insurers remain exactly what we've spoken about to you many times, including recently at Capital Markets Day. I would just say that, particularly on the Shriram Life side, we will now have a clear the effector control, including management control. That's been expressly agreed as part of the sort of new shareholders' agreement that will come into being once those transactions are approved. So we can drive the strategy more directly, but the strategy remains as it is on Shriram Life, I think you understand it well. We're very, very comfortable with that strategy. So it's about backing it. On the Shriram general side, and again, similar, I think we've spoken in the past, we at Sanlam would like to see some faster diversification away from just the motor side of things. That is now happening. But we would like to -- that would be the one additional shift we would want to see a bit more of beyond everything else that's being driven in that business. On the wealth management side, very good progress organically in the market. I think I spoke to this quite a bit at the Capital Markets Day. And there's no sort of material new update beyond that. So a lot of relationship managers have been recruited across, I think it was 9 cities. And so good organic progress in that business. Obviously, we expect to be talking about in a profitability as a material factor only in 3 or 4 years or so. But in terms of getting the structure in place and the people in place and the clients in place, very pleased with progress there. It remains a relatively small business, though. But we are keen to invest into that space. It's a big opportunity.

Our next question comes from Marius Strydom of ALG.

And Paul and team, and happy New Year to you. My question is discretionary capital and solvency. For the last year over the last 6 months, the rand strengthen meaningfully year against. My question is, how or how do you think the actual deployed amount of capital paid -- what you ...

You broke up by -- you're breaking up terribly. If your question is, did we hedge it or not, sadly, we did. Unfortunately, but if there's something more you want to ask us, -- and I can't shoot Mlondolozi if we're hedging it because if we hadn't would have killed them as well. So we did missile on that windfall.

Okay. I would like to ask another question clearly.

Don't you see if you can just get a better is breaking up. I think it's not only me struggling to hear you?

Okay. I will take you to ...

Just tap it in, just chat, put it in the chat and we'll be able to see it, I'm sure.

Okay. Operator, any other questions online on the on Chorus Call?

No, there are no further questions in the queue.

Can we see Marius' question or not anywhere typed in, guys?

Not at the moment but we will ...

[ Takella ] would you just reach out to him because it's just frustrating for everybody having some growth in telephone line. Great. Well, I think that brings us to the end, everybody. So let me thank you all very much for making the time, and I really appreciate it, and I wish you all the very best for the year ahead and good luck. If there any more questions, please reach out to together, and we'll endeavor to help you. So thanks very much to my colleagues as well and take care.

Thank you.