Africa’s largest insurer flags risks from oil, market uncertainty

News desk: Sanlam Ltd., Africa’s largest insurer, has warned that growing geopolitical tensions and volatility in global energy markets could weigh on its performance across more than 20 countries where it operates.

Group CEO Paul Hanratty said heightened uncertainty in global markets is increasing economic pressure, particularly through rising oil prices, inflation and tighter financial conditions.

The International Energy Agency has cautioned that disruptions in key oil transit routes such as the Strait of Hormuz, which carries around 20% of global oil supply, can significantly tighten supply and trigger price spikes.

Higher oil prices have already contributed to persistent global inflation, with many central banks maintaining interest rates at elevated levels. This has increased borrowing costs for businesses and households, potentially reducing demand for insurance products and long-term savings.

Sanlam, which manages billions of dollars in assets, said market volatility could directly affect its assets under management (AUM) and fee-based income. Equity market fluctuations and bond yield instability have increased investment risk, particularly in emerging markets.

The insurer also noted potential implications for major cross-border transactions. A planned deal involving Mitsubishi UFJ Financial Group and India’s Shriram Finance, valued at approximately $4.3–$4.4 billion, remains sensitive to global financial conditions despite receiving shareholder approval earlier this year.

Analysts say insurers with diversified geographic exposure and strong capital positions are generally better placed to absorb shocks. However, prolonged geopolitical instability and sustained market volatility could still slow premium growth and reduce profitability across the sector.