South Africa-based Sanlam Group has no desire to own 100 per cent in its two Indian insurance ventures – Shriram General Insurance Company (SGIC) and Shriram Life Insurance Company (SLIC) as that would undermine the very basis upon which it operates, said a top official.
This observation by Paul Brendan Hanratty, CEO, Sanlam Group comes at a time when India’s Union Budget for FY2026 proposed raising the FDI (foreign direct investment) limit for the insurance sector from 74 to 100 per cent, for those companies which invest the entire premium in India.
Sanlam, South Africa’s diversified financial services company, has 51 per cent stake in SGIC, and 54 per cent in SLIC.
In an interaction with businessline, Hanratty emphasised that his company needs the Shriram Group to be both owners and operators of these businesses. Moreover, the ecosystem at the Shriram Group is really important.
“We have a business philosophy of partnering outside of South Africa. And even in South Africa, in many cases if it is in certain areas, we partner.
“There are two very important aspects to this philosophy. One is you need local management who understand the market and the customer. Without that I think you are in big trouble. The second thing is, we think, it is really important to share value with local communities and so on,” the Sanlam Chief said.
Skin in the game
Hanratty said Sanlam builds businesses over time, underscoring that its latest foray into wealth management with Shriram Group was in the making for the last couple of years or so.
“Actually we wouldn’t want to be 100 per cent owners of the insurance companies. To us that would be the beginning of the start of destroying value because they (Shriram Group) are not going to have skin in the game.
“It is very important that the whole Shriram ecosystem has a lot of skin in the game. Plus they understand the market,” he said.
The Sanlam chief noted that both Sanlam and Shriram are very passionate about their business.
“We are very comfortable with our shareholding as well. It’s not that I have lost interest in these businesses. I think we are in the sweet spot,” he said.
Hanratty underscored that when the FDI limit in insurance companies increased from 49 per cent to 74 per cent in 2021, Sanlam did not even reach the upper limit. “So, why will it go to 100 per cent?” he said.
