Good day, and welcome to everyone joining us online today for Sanlam's 2024 interim results presentation. I am Grant Davids, Head of Investor Relations at Sanlam, and I'll be facilitating today's session. I am joined in the auditorium by our Group CEO and Group Finance Director, as well as members of the executive leadership team. As usual, our Group CEO, Paul Hanratty, and our Group Finance Director, Abigail Mukhuba, will present today's results. But today, we also have short presentations on our Pan Africa as well as our India operations. We'll then move to a Q&A session after the presentation. With that, I'll hand over to Paul.
Grant, thank you very much, and good afternoon, ladies and gentlemen, and welcome to the presentation of Sanlam's first half of 2024 financial results. I'm joined today by Abigail Mukhuba, by Heinie Werth, the CEO of SanlamAllianz, and David Marshall, our Head of Group Strategy, who's responsible for the Asian operations, as well as Lotz Mahlangeni, our Chief Actuary and Chief Risk Officer. I will give a very brief overview of the first half of 2024 and talk about our strategic progress and the capital allocation that we've been busy with before handing over to Heinie to provide an update on the progress of the new SanlamAllianz joint venture. David Marshall will then give us a short overview of the performance in India before Abigail covers off the financial results in detail.
I will then give a brief explanation of the focus for the balance of this year and some perspective on our outlook for the full year. Sanlam has continued to deliver solid operational results, and these underline the ongoing quality and consistency of our franchise. Our diversified group, with a strong engine in South Africa, complemented by growth vectors in the rest of Africa and India, provides a unique blend of return and growth. Although we've undertaken a number of transactions, our capital allocation process has remained disciplined, and we continue to focus on the integration of acquisitions. Sanlam's consistent performance is entirely attributable to our people, as well as to our key partners. Ubuntu-Botho in South Africa, Allianz in Africa, and Shriram in India, have made very crucial contributions to our performance in this period.
Our own Sanlam people continue to put our customers at the center of everything we do, ensuring that Sanlam maintains leadership in our chosen markets. We understand that long-term growth at Sanlam will be greatly assisted by the power of financial inclusion, which can help to elevate economic growth in each market, improve living standards, and grow the addressable market. The first six months of 2024 has seen the group grow its business successfully, maintaining margins and continuing with efficient capital deployment. The net result of this is that we've grown profits on a cash basis per share by 20%. We've grown life new business by 14% and the value of new business by 10%. We've grown net client cash flow strongly, a little bit back in line with its historic levels.
We've achieved a return on Group Equity Value, which is our main metric, well above hurdle on both an adjusted and an actual basis, with the difference between actual and adjusted being largely driven by currency depreciation in a few key African markets. Strong performance in the SanlamAllianz joint venture and the recovery of the underwriting margin at Santam, as well as the ongoing solid performance from India, have been highlights of the first six months of 2024. But with a few minor exceptions, we've seen good performance from all our businesses across the group. Within South Africa, our life insurance business achieved good experience profits and a good new business result. We implemented new remuneration arrangements in our retail mass business at the end of the first quarter, and persistency in this segment remains a key focus area for the group.
Although we had a small persistency loss for the first six months, we are seeing a positive trend and are optimistic that for the full year, our persistency assumptions will prove to be adequate. The financial performance of AfroCentric has been disappointing. The newly appointed CEO and other newly appointed executives are working hard to turn around the earnings of the business. Changes in the pharma sector of this business have significantly reduced earnings, and the required investment in IT, processes, and people has been higher than expected. I believe this turnaround will take some time, and you will see that we've had to write down the value of the business during this reporting period, reflecting that the business is now worth less than we previously thought.
I still believe that Sanlam has the makings of a strong and vital health insurer in South Africa in its operations, and that the hard work and investment will prove valuable over time. Santam management's hard work to turn around the underwriting performance has been rewarded in the first six months of 2024, and we're extremely pleased with the trend of improvement in performance at Santam. The net result of the South African life insurance performance, Santam's turnaround, and the write-down at AfroCentric, is that we have met our hurdle of return for the first six months in South Africa.... Within the SanlamAllianz world, good performance in the life insurance line and a solid result within the target range from the general insurance product line, mean that we've achieved an excellent adjusted return on Group Equity Value outcome.
Allianz has exercised its option to acquire the Namibian business, and we expect this transaction to close shortly, with the payment cash due from Allianz to Sanlam. The Namibian business will strengthen the SanlamAllianz business, as it is a strong and successful business within our portfolio. In India, the finance business continues to grow its book, with credit loss experience within our target range. The insurance businesses continue to grow strongly. We have updated our Group Equity Value in respect of these various businesses during the first six months to reflect the improved outlook for these businesses. Malaysia is a small set of operations for Sanlam, and generally do not get much focus in our reporting. A change in local regulations has meant that certain expenses previously borne by policyholders in the life insurance company are now having to be borne by shareholders.
This has resulted in a loss in the current year, and we expect a loss from this source for the next few years, gradually reducing as the business grows and expense efficiency actions are taken. Various transactions have been executed over the last few years at Sanlam. Capital has been raised from a number of sales, including small businesses we've chosen to exit from, but the large contributions that arose are from the sale of the U.K. life and wealth business, as well as from bringing our partner into the asset management business to create South Africa's largest Black-owned asset manager. The majority of capital deployed in this period has been into South Africa, consistent with our strategy to maintain a fortress position in South Africa.
There has also been a moderate investment into Africa as part of the SanlamAllianz joint venture, transaction, and the consequent mandatory takeover offer in Morocco. But it has to be remembered, the Namibian transaction I referred to earlier, will more than offset these. The net result will that we will have slightly reduced the capital allocation to Africa, ex-South Africa. However, we will now have a stronger and more diversified business across Africa. In addition, over the last few years, Sanlam has effectively bought back ZAR 4.2 billion of shares through explicit buybacks and the closure of the SPV. These shares were all acquired at well below the current market price. We have now raised net new capital of ZAR 3 billion through the issue of subordinated debt.
The net result of all these actions is that discretionary capital has increased by about ZAR 2.5 billion over the period 2020 to 2023. In the first six months of 2024, we sold Shriram Finance shares to prepare for the partial funding of the Shriram Insurance stakes. We are currently awaiting regulatory approval. We are satisfied that the recycling of capital and the buyback of shares represent a disciplined and value-creating capital allocation process. A major deployment of capital that will take place in the very near future is the acquisition of Assupol. This represents a very big commitment to investment into the South African market, and it enables Sanlam, post the closure of the Capitec JV, to remain as a key participant in the financial services market in this segment.
Given the scale of this capital deployment, management is allocating significant resources to drive the integration of Assupol into the Sanlam South African operations. While various bolt-on transactions in South Africa, including Capital Legacy, the Absa Asset Management businesses, and various transactions with Alexander Forbes have been successful, we are obviously not currently satisfied with the return on the additional capital deployed into AfroCentric. I believe that ultimately we will achieve our strategic goals within the South African health insurance space, but right now, there's focused management attention to turning around this business. Within our Fintech cluster, we've recently announced our intention to acquire a 60% stake in the MultiChoice Group insurance business. We believe there's a great deal of potential in this business going forward, given that the subscriber base is excellent and the premium collection system is extremely efficient.
We have also now bought out the minorities in our Sanlam Personal Loans business, and this business is located within the Sanlam Fintech cluster, as we intend to expand this business digitally over time. On Monday this week, we announced the acquisition of 25% of ARC Financial Services Holdings as a portfolio transaction. In 2021, Sanlam deepened its strategic partnership with Ubuntu-Botho by taking a 25% stake in ARC Financial Services Investments, and in turn, ARC Financial Services Investments took a 25% stake in Sanlam's South African asset management business to create a very large, powerful asset manager. Sanlam has benefited from this transaction in a number of ways. The estate assets, which really are shareholder assets, invested in the ARC Financial Services investment portfolio, have earned a return of 24% per annum.
Furthermore, we've explored strategic opportunities with companies inside the ARC Financial Services Investments portfolio. Very significant opportunities have been opened and developed with Capital Legacy and Alexander Forbes. The transaction we announced on Monday takes this partnership further, as Sanlam will now have a 25% stake in the entire financial services portfolio of ARC. The two largest assets that Sanlam will now have exposure to are TymeBank and Uber, and we're exploring ways to leverage these assets for our strategic benefit. We are currently in the process of bringing TymeBank in as a key technology partner to support our Sanlam Personal Loans business. We bought this business out from FirstRand, and we need to move off the legacy technology stack that that business runs on, onto a modern stack to enable the digital development of this business.
We've always been clear that Sanlam does not intend entering the banking industry. We now have an indirect 12.5% stake in TymeBank, and we view this in much the same way as we view our stake in Shriram Finance, as an adequate investment to allow us to meaningfully participate in the relevant ecosystem. We are exploring how to develop the insurance offerings for this ecosystem, and are also looking at how to make banking services available to our clients. At this point, I'm very happy to hand over to Heinie Werth, the CEO of SanlamAllianz, who will take you through a few short slides to give you an update of progress in the first six months on that business. So over to you, Heinie.
Thank you very much, Paul, and it's a privilege to give some information around SanlamAllianz and where we stand after nine months. I will talk a little bit about our strategy, give some information where we stand on the integration following the merger, and then lastly, a bit on the numbers and the future. What we are really about is building a diversified foundation for the future. We believe in Africa. We believe in the future of Africa. We believe there will be lots of issues, but also lots of opportunities. As you well know, we operate in 27 markets across Africa, and the core focus at the moment is about growing and optimizing those businesses that we do have. It's a very simple strategy. In the end, it is about execution. That is where the real challenges are.
Growing and optimizing our businesses is about ensuring that we have successful integrations. I will elaborate a bit more on that on the next slide, but a successful integration really will pave the way for the future, and I'm happy to say that the first nine months went well. Optimizing and growing our businesses is about the basics in the business. It's about what drives the top line, what drives the bottom line. It's about cost, capital management. It's about, our cash management in the businesses. It is making sure we help our businesses, and specifically, in the short term, ensuring what we call our core or priority markets, where we have our big, bigger businesses, to ensure we don't drop the ball there.
Then, in addition to our core life and general insurance businesses, it's about making sure that we optimize our captive reinsurance business, Sanlam Allianz Re, to optimize the reinsurance opportunities coming out of our 27 markets and placing it internationally with other reinsurers. And then, the future for that business is also to go into countries where we don't have our own life and general insurance businesses, but to also allow our reinsurance vehicle to do business with those countries. That is work in progress, but we see that as a great further opportunity. Then... Actually, when you look through our businesses, it's predominantly about life and general insurance business, but asset management is core. Our on-balance sheet assets are a big part of our business, and as you well all know, there's limited opportunities on the African continent to invest in.
Capital markets are quite often still small, less developed, and it's making sure that we run a proper portfolio of assets backing our life and GI businesses. And then, non-negotiable, the message to all our businesses, always around governance, risk, and compliance, a sound foundation for the future. The role of the ops or the center in all of this, when you sit with two reputable shareholders, like Sanlam and Allianz, I want to say there's a lot of requests, a lot of governance we have to comply to, reporting. So we manage those relations, but more importantly, it's then really about what is our overarching strategy and benchmarks for our businesses? How do we support them technically and operationally out of the center? And how do we help them with cross-border relationships, opportunities like bancassurance? So that is what our core focus at the moment is about.
But in the end, we do run a portfolio of businesses across the African continent. There, we always want to be a top three player wherever we operate. Certain markets, we are not there. Certain core markets, we are not there, like Nigeria, Kenya, and Ghana. We will gradually move and start to look for businesses to help us to get scale there, where it makes sense. In our business, there will always be opportunities where we are approached with opportunistic bolt-ons. We are not looking for them, but we will always be willing to evaluate them in light of the future. And then we are very clear. If we do not really believe in the long-term future of a business or country, we have to exit it. We cannot pull the portfolio down.
And then over time, we are not yet in all the big countries across Africa in terms of GDP. It's in no hurry, but over time, we may add two or three more countries to the portfolio. All of this, and Paul also referred to that, it's always about people, especially when you bring businesses together like we did over the last few months. It's about people, making sure we've got the right people, people who believe in our story, people who believe in what we are busy with across Africa. It's about systems. It is quite complex, given all the integrations, but that's a big enabler for us in the future. And then it's about investing and capitalizing on our brand.
The SanlamAllianz brand is very, very well accepted across Africa, and the addition of Allianz to the Sanlam brand really opened doors for us. So that's a bit on the strategy. Very simple, but it's all about execution. This is a very busy slide. I don't really expect you to read it or to go into the detail. As part of the merger, there's 11 countries where we had overlaps. Four of them, all the first phase integration are behind us. The regulatory approvals, we got that. We started to rebrand. Ghana was the first one to rebrand. Cameroon, Senegal, Côte d'Ivoire, will rebrand during September and October to SanlamAllianz. It was about vesting the management team, settling down the people, the uncertainty, our clients, our partners. And now, the next phase will obviously be on system integrations, which will bring its own challenges.
Then, the next country that we should be able to get regulatory approvals is Madagascar. In the case of East Africa, Mauritius, Tanzania, Uganda, Kenya, we're still in discussions with our biggest co-shareholder on the future. Once we've finalized that, we will submit applications and also proceed in those countries. Those countries in East Africa, combined with Nigeria, will most probably only be finalized early next year, with a bit of luck, still in quarter four this year. You will know in Morocco, we had a whole separate undertaking. We have submitted our proposals to the regulator on how to address these, their concerns. We hope to get feedback over the next few months. I myself quite regularly engage with the regulators and will again go there over the next month or two.
But Morocco, we also hope to draw to a conclusion sooner than later, but I would rather say the decision on the future will then be a bit later than the other countries on the table. So all going well, in terms of the overarching estimated synergies, we are a bit ahead of what we planned, so that's a good story for us as well. In terms of integration costs, which is a big amount when you look at people, systems, and brand, there we are also below what we thought we may need to spend. But all remain work in progress, but after nine months, we are well on track in terms of what we hoped to achieve, what we promised to do, and what we are delivering. Looking at the results, and Abigail will elaborate in more detail.
This is a snapshot on a pro forma basis. I have to say it's unaudited. This is as if SanlamAllianz was in existence on the January 1st, 2023. So it compared the six months of this year with the first six months of last year. It is as if Namibia, the portfolio, included Namibia. Paul referred to that. That transaction will happen soon, and it gives you really a snapshot, but if this cluster or business were in existence last year, how would we have compared relative to last year? So it's unaudited, it's constant currency. The results are actual numbers, but the percentages are measured in constant currency. We were hit by exchange rate movements, especially in Nigeria and Egypt, but even after that, the percentage growth, in general, is quite satisfactory.
But on a constant currency basis, if we look at our two big units, our general insurance, Paul referred to it, a very solid underwriting or insurance margin. That's a combination of our underwriting margin and float of 11.5%. This is within the target or expected ranges of what we communicate last year at our investor day, what we see as our targets for the business. We're a bit behind on top line growth on the general insurance side. We will get to the 12% and the 15%. I'm very confident that Delphine and the team will get there. We have to make sure, however, the whole time, that we don't write bad business. It's very easy to get premiums.
The GI team will quite often tell me, we can write you a lot of business, but in the end, it's about finding that balance between top-line growth and the margin. But a very satisfactory 11.5% margin. Life insurance, really, they had a great six months. We never monitored gross written premium in the past. That's why we don't. We just give you a number there, not a percentage. But new business volumes, 23% up. Value of New Business, 35% up. Really, a sterling performance in, I still want to say, very, very difficult times. Net Result from Financial Services for the cluster as a whole, up 58% to ZAR 1.4 billion. That excludes certain one-off, exceptional one-offs, which will come through in Sanlam results, but for this, we really want to compare apples with apples.
For the future, attributable earnings, a bit more volatile, but a strong stock market over the last six months, which helped us there. And then Paul referred to it, a 12% return on Group Equity Value, on an adjusted basis. It's lower when we take exchange rates into account. But overall, I want to say, a very good set of results. We will do our best to continue with this. I don't think all the percentages you can just take for granted, it will now double. But I do know the teams that we have in countries, in the hubs, will give it their best shots.
Dividend, when we refer to a payout ratio of 65%-75%, that is where we say, if we take our net result from financial services that we have in the countries, minus our group costs, what percentage of that will find its way to the shareholders? Now, due to various structures, due to certain hold ups currently in places like Egypt, especially, given that we have to vest some working capital. What I can tell you, our countries pay out much higher percentages than that at the moment. But for that to flow through our systems, where it's trapped at the moment, and then to get it through to the shareholders, might take another, I want to say, year to two years. But all the signs that we see is that once we settle down, that percentage will be achievable. That's basically a lot from my side.
I've said already, if we look forward, I do think times are really difficult out there. Inflation remains high. Interest rates are still high. Certain markets are still increasing. There's a lot of pressure on certain exchange rates across the continent. But even within that, I do believe we've laid a foundation to get off the ground with the merger, and we will do our best on the future as well. What really help us, and I want to conclude with that, is to know that we've got two committed shareholders who back us. People recognize their financial strength, and very, very important, people recognize those two brands, and that will help us as well. Thank you. With that, over to David.
Thank you, Heinie. Good afternoon, everybody. As many of you will know, we've been in partnership with Shriram now for nearly 20 years, and we believe it is one of the most enduring and successful international partnerships in India today. Over that time, we have invested a little over ZAR 8 billion to date, and on the back of which our GEV is conservatively just over ZAR 23 billion as of now, or 15% of the group GEV. We think this represents sound value creation so far. The Shriram Group structure is quite complex, with various minority shareholders at different levels, but we've been steadily simplifying it over the last three years or so to streamline into a partnership between Shriram and Sanlam as the two main partners for all the business lines in India.
That restructuring is quite a lengthy process from a regulatory perspective and likely still to run for some time, but it is also already yielding material synergies in the credit business. The size of the opportunity in India is well known, but perhaps it's just worth pausing for a moment on some practical comparisons. For instance, the population in India is 24x the size of that of South Africa. There are over 30x as many vehicles on the roads. At the same time, insurance penetration remains low compared with South Africa. So together with the other positive macroeconomic factors in India, which are well understood, we believe this represents excellent structural tailwind for all of our businesses in India, and this is why we look to allocate capital to them as and when we see appropriate opportunities to do so.
But it is important to note that while the transactions announced earlier this year represent an increase in economic exposure to these growth vectors, they in no way change the control dynamic or our level of influence in the businesses, which is already very strong. The shareholding in Shriram Finance of just under 10%, Paul alluded to earlier, together with Shriram's stake, forms the promoter group of Shriram Finance. But as Paul indicated earlier, it is the key to underpinning the success of the insurance businesses in which Sanlam obviously has a more material shareholding in the 40% range. And that is because Shriram is actually a perfect example of an ecosystem business, as we've tried to represent in the graphic on the right.
With credit and the insurance businesses mutually reinforcing each other, together with what we've called here, other financial services, by which we mean stockbroking, wealth management, and asset management. These businesses within Shriram are currently small, but we see significant potential there, as Shriram's customers are becoming more affluent and their financial needs are evolving accordingly... Turning to Shriram Finance itself, it's as you well know, the largest financier of secondhand vehicles in India, especially commercial vehicles and two-wheelers. Its focus is on the underserved rural and semi-urban areas, which means that it is effectively a barometer of the health of rural India. In fact, Shriram Finance has done extremely well to significantly increase its penetration in these underserved segments, from 75% of its book five years ago, to over 85% currently.
And these segments are more difficult and expensive to penetrate for insurance as well as credit. And so the point is that Shriram's footprint provides it with a material and increasing competitive advantage among the most significant part of the Indian population, with excellent scope for continued growth. Shriram is also one of the most customer-centric businesses you will find. For instance, Shriram Finance has 58,000 agents who are all in the communities with their customers, and they pride themselves on the broader role that they play in the poorer and rural communities. So as such, it is a wonderful financial inclusion story, and today it's no surprise that international ESG investors are investing strongly in the stock, and also participating in the funding lines, for instance, through the likes of social bonds, which is a strong underpin for the ongoing growth of that business.
Loan book growth has been stronger than we expected, particularly as the synergy benefits after the merger of the credit businesses are being realized, and also due to the wider distribution of retail products from the former SCUF via the branches of STFC, and also supported by growth in asset values. The loan book performance has continued to improve, with net interest margin increasing. At the same time, bad debt ratio has been declining. Turning to Shriram Life Insurance, it is a relatively small player in the context of the Indian market. However, it has been growing significantly faster than the market as a result of initiatives like building new partnerships, and that is resulting in significant increases in market share.
I should note that the market shares you see on this slide exclude the government-owned life insurance company of India, but then again, this private sector of the industry is growing much faster than LIC. So we're pleased with how this business has progressed on diversifying product mix and distribution, and we expect this open market channel to grow faster than the Shriram Finance ecosystem as we continue to build agency, establish more partnerships, and penetrate deeper into the core rural segments. Shriram General likewise has shown strong growth relative to the market, yet it retains the strong focus it's always had on profitable growth. It is not a significant player in the health space, and that is the largest part of the GI market in India, and the fastest growing segment.
But however, Shriram General's non-motor share is expected to increase over time as we grow the the health and corporate business lines. Again, very strong growth in the open market channel has outgrown the Shriram Finance ecosystem, and this now stands at around 60% of the total, due to expansion of the agency force, which now numbers more than 70,000 agents. So in summary, I hope I've been able to convey that we have reason to be very positive on the current growth and the outlook for all of the Shriram business lines. And we anticipate strong, ongoing value creation and dividend growth for the foreseeable future. Thank you. I'd like to now hand over to Abigail Mukhuba, our Finance Director.
Thank you, David. Good afternoon, everyone. I am pleased to walk through the financial results for the first half of 2024. Our performance in the first half of the year reflects the disciplined execution of our strategic priorities across all levels of the group. A key feature of our year-on-year comparison is that when you look at our results, 2023 reflects Sanlam's Pan-Africa investment before the SanlamAllianz joint venture was established, and the 2024 results reflect the Pan-Africa business after the establishment of the joint venture. Suffice to say, we achieved solid growth in all our key performance metrics, and I'll highlight the main drivers. Our key earnings measure, which is the net result from financial services, is up 14%. This growth is supported by good delivery across all the lines of business and across the various regions.
Very strong growth in insurance was supported by good growth in investment management, as well as credit and structuring. In the next few slides, I will go into more detailed line of business analysis. But for now, investment income and surpluses were, in total, down on 2023, and this was mainly due to lower equity returns and unfavorable currency movements. I also want to flag that we remain committed to maintaining financial discipline and ensuring long-term sustainability of our projects. We will do this by keeping close watch of all project expenditure, ensuring that costs are managed effectively, and that these costs remained aligned with our strategy realization as well as budgetary expectations. Our strong cash earnings position demonstrates our ability to generate consistent and sustainable cash, and reinforces our overall financial stability.
To arrive at a view of our cash earnings, we normally adjust for technology amortization expenses, along with other small non-cash items. If you look at the increase on the adjustments year-on-year, it is mainly due to the inclusion of AfroCentric, which is now consolidated. But if you remember, in the first half of last year, most of that period, it was equity accounted. This reconciliation shows how we move from IFRS earnings to Sanlam core operating earnings, in line with how we manage the business. So for this period, over and above investment return adjustments, our shareholder fund adjustments also included the Capitec recapture fee, which we announced with our year-end results.
Maybe just by reminder, the cooperation arrangement between Retail Mass and Capitec is terminating with effect end of October this year, with a recapture fee of ZAR 1.9 billion gross of tax being payable to Sanlam Group as a compensation for the share of future profits that we will no longer be entitled after termination. Accounting standards require that a portion of the fee be recognized as profit in the income statement before the cash is received in the bank. The contra of this is that this treatment creates a non-cash insurance contract asset. Internally, we have therefore adjusted for these non-cash earnings. This adjustment will not be required from November once the cash has been received and the insurance contract asset no longer exists.
We also have, over and above this one, other shareholder fund adjustments, similar to asset mismatches and typical investment returns, as I already mentioned. Paul already alluded to return on group equity value as being our key metric for value creation that we focus on. Both on an actual and adjusted RoGEV basis, we achieved a performance that was above seven point five hurdle rate for the six-month period. Our VNB benefited from satisfactory levels of new business volumes, especially in the South Africa retail affluent, as well as the corporate businesses, but also we saw good performance in Namibia. The Covéa and life insurance business also delivered positive risk, working capital, credit spread experience variances. Persistency experience variances improved from a small negative in 2020 to a small negative in 2024, vis-a-vis a large negative in 2023.
You might recall that we strengthened our persistency basis in December 2023, in the Retail Mass business, and this was a large driver and contributor to the improved persistency experience variances that we saw in the first half, as well as improvements in Pan Africa. Operating experience variances and assumption changes together contributed about 2.7% to our ROGEV. On the non-covered business side, we saw higher valuation of the Indian credit business due to improved performance as well as a positive outlook, coupled with strong operating results from Santam and cost efficiencies in the South Africa asset management operations. So all these positive contributions were partially offset by the strengthening of the rand against some of the major currencies in the territories where we operate. Already, Heinie and Paul have alluded to the Egyptian pound.
With all the activities in the first half of the year, the group solvency position, I'm pleased to say, that has remained stable and strong and within target range. I will now move to unpack the performance in the key lines of business. We saw good earnings growth for the life insurance business, which was largely supported by the growth in the Pan Africa, and to a small extent, partially offset by lower earnings in Asia. Over and above, the favorable risk experience for both South Africa and Pan Africa portfolios, with particularly strong performance recorded out of Namibia and Morocco. South Africa benefited from premium growth, a larger book size, as well as a rise in asset-based fee earnings. Whereas Pan Africa benefited from cost-saving initiatives and a recovery in investment markets in Morocco. Botswana also recorded strong performance.
On the Asian continent, India maintained performance, which was consistent with that of 2023 on the life side. It balanced the sustained growth in its book and enhanced investment income against the cost associated with expanding distribution to bolster continued healthy new business sales. As mentioned earlier, Malaysia had challenges, in as far as a downturn in earnings due to challenging claims environment. Paul also had talked to the point of regulatory changes that also impacted elevated expenses in that business. Earnings in the South Africa health business, the administration portfolio business, they increased by 83%, but that is largely because of the consolidation of AfroCentric after the ownership increase between the two periods. This business is navigating challenges, and on a like-for-like basis, the performance has been, that has been disappointing.
But we do believe that the newly appointed management team has a solid understanding of the drivers behind the underperformance, and the plans have been put in place to turn this business around. I must just flag that both Malaysia and AfroCentric are small contributors to the group's overall earnings at this stage. On a volumes perspective, on a volume side, on a like-for-like basis, the life insurance business volumes increased across all regions. The structural change in the Pan Africa portfolio after the implementation of the JV makes it very challenging to make any sense of a year-on-year comparison. In South Africa, the Retail Mass business experienced growth with the Capitec business, providing strong support to the individual life business. The individual life business experienced moderate growth, despite steps that were taken by management to reduce policy churn.
In the affluent sector, the growth in single premiums was driven by improved international sales and continued strong guaranteed annuity sales. This was partially offset by subdued recurring premiums due to lower direct channel sales. The corporate single premiums business benefited from strong annuities and guaranteed investment sales, while recurring premium growth in this line of business remained muted. In the SanlamAllianz joint venture, we saw a record of good performance across most countries. Heinie has already alluded to that performance. The larger contributors, mainly Botswana and Namibia, recorded strong annuity and group sales, which was further augmented by growth in annuity and unit-linked business sales in Morocco, Nigeria, and Egypt. India's volume growth was mainly driven by the expansion into the Shriram ecosystem that David was talking to, as well as implementing new external distribution partnerships.
If you allow me to move to value of new business, the group net VNB performance was propelled by both the affluent and corporate businesses in South Africa, as well as the shift to higher margin product sales in Namibia. The retail business delivered growth mainly because of enhancements in product mix and increased business volumes, which were partly offset by the impacts of persistency basis changes that I referred to earlier. Asia's contribution was lower than the prior year, impacted by costs of establishing the new distribution channels. And then lastly, on this slide, from a client cash flow perspective, life insurance flows increased by 42%, mainly driven by South Africa and Asia, whilst Pan Africa's contribution benefited from the inclusion of Egypt into the portfolio. We are very pleased with our general insurance business earnings increase, which was supported by strong performance from Africa.
As you would have seen last week in their announcement, our Santam business achieved strong underwriting performance, despite continued weather-related claims during the period, testament of the benefits of the corrective underwriting actions implemented over the past eighteen months. Pan Africa earnings growth was supported by an improved investment return on insurance funds margin. In Asia, the earnings decreased slightly due to the one-off positive modeling changes impact in 2023, which did not repeat in 2024, which offset improvements in underwriting experience. New business volumes decreased by 2%, impacted by structural changes, again, in the Pan Africa portfolio. Santam saw its conventional insurance business net earned premiums grow by 7%, with most business units contributing to the growth.
Volume comparison for the Pan Africa business, which is impacted by structural change, has recorded strong contributions from Sanlam Allianz Re, and Egypt, as well as a stronger growth in motor and commercial sales in Morocco. New business volume growth was dampened by underperformances in Angola, Côte d'Ivoire, and Kenya due to the lower retention of some of the businesses there. However, we continue to keep our management focused to turn the underperformance around. The increase in Asia was fueled by enhanced distribution initiatives across all product lines in India. The improvement in performance in the international asset management operations supported the earnings growth in our investment management business. South Africa recorded growth driven by improved base fee income and expense efficiencies. This was partially offset by lower private equity carry fees in the alternatives business and lower performance fees in the active asset management.
The international business recorded a 32% rise due to equity fee income growth and effective cost management. Pan Africa benefited from higher market-related fee income and book growth, again, on a like-for-like basis. We saw a strong rebound in net client cash flows to just over ZAR 4 billion. Earnings from our credit and structuring business increased by 9%. This growth was largely driven from India, where we saw higher credit advances through building of open market distribution capacity to increase market share, as well as cost efficiencies and improved collections. South Africa's increase, on the other hand, was driven by higher structured transaction fee income, lower loan write-offs, and a larger shareholding in Sanlam Personal Loans. This was partially dampened by investments in technology and muted credit book growth.
Pan Africa operations recorded a decrease as higher loan write-offs and elevated operating costs continue to persist in this high inflationary environment. In conclusion, from my side, these strong financial results are a testament to the hard work, dedication, and strategic focus of our entire team. We have not only met, but exceeded our targets, demonstrating the resilience and adaptability of our business in a challenging environment. We remain committed to driving sustainable growth and delivering value to our stakeholders. Thank you for your continued support and trust in our vision. I will hand to Paul.
Abigail, thanks very much for that tour de force around Africa and India. I'm going to end off our presentation by focusing on our key areas that we're paying attention to for the balance of the year, and just give you a little bit of an idea of our outlook for the full year. The financial results for the first six months of 2024 represent a continuation of our focus on growing profits and returning cash to shareholders. Our focus in the second six months of 2024 is to ensure that we can continue to deliver solid financial results that will enable us to maintain the consistency of financial results for the full year. We're maintaining a very strong focus on turning around Retail Mass persistency experience.
Although, as I mentioned, we've seen positive signs of improvement, it is really too early to relax the intense focus on this area. We're also in the process of finalizing the closure of the Capitec joint venture at the end of October. Our attention will then shift very quickly to the onboarding and integration of Assupol, a very large transaction in our corporate history. In due course, we will communicate the targets we have set for this business and update you on progress in integrating this business. A key focus area will also be on finalizing agreements with TymeBank to ensure that we can begin utilizing their technology platform to support our personal loans business. And as Heinie has indicated, we're in full swing in integration in several in-country mergers, and we'll need to continue to focus on the delivery of these projects.
In India, we're very focused on the continued expansion of the insurance businesses and the development of the asset management and wealth business in that space. Momentum is good in almost all of the group businesses, and we're reasonably confident that the trends that we saw in the first half of the year will continue into the second half. Post the South African election, we've seen a reduction in long bond yields, reflecting improved sentiment towards South Africa. This has already begun to impact the new business sales mix, and we would expect the mix of single premium new business in South Africa to continue to shift in the second six months away from immediate annuities and more towards living annuities. This will negatively impact the reported new business margin, but as I've explained many times before, that's simply arithmetic.
The value of the living annuities is just the same to our shareholders. I regard the biggest risk to the full year result to be from global markets, where although sentiment is currently reasonably positive, any hard landing for the U.S. economy would almost certainly unleash a very negative chain of events. Sanlam will continue to drive performance in our operations, and we do expect a solid full year set of results.
I want to mention that Sanlam traditionally hosts a capital markets day in October, but because there are quite a number of transactions closing in the second half of this year, we've taken a decision to move our capital markets day into the first half of 2025 , when we'll be better able to brief you fully on the strategic progress on quite a number of fronts, including how well the Assupol take on is going. As Abigail said, thank you very much for participating, and particularly thank you for those of you who are shareholders. We really do appreciate your support. I'm now going to hand over to question- and- answer session that Grant will host, and we'll have all of us, including Lotz, available to answer questions. Thank you.
... Thanks very much to Paul, Heinie, David, and Abigail. As Paul mentioned, Lotz Mahlangeni, the Group Chief Actuary and Chief Risk Officer, has joined us as well. We do have a number of questions from both the webcast and the telephone lines. I think I will begin with the telephone lines, and then I will read out some of the questions that have come through on the webcast. So before I go to the first question from the telephone line, I'll just ask that you please introduce yourself on the telephone line, your name and the company you represent. So we'll begin with Mashuda Cassim from Cachalia Capital . Mashuda, if you can go ahead. Do we have the telephone lines live? Okay, I think while they connect the telephone lines, I will go to the webcast.
Our first question from the webcast is from Michael Christelis from UBS. The question is: What is the outlook for mortality variances in the next six to 12 months?
Grant, I'm just gonna check with Lotz. Do you want to answer that, or Abigail, or do you want me to do it?
Yeah, you can go ahead. I'll cover-
I know less about it than the two of you. But, Michael, it's nice to see that you're now using the web to beat everybody in to the front of the queue rather than the telephone. So, it's the same reason we're trying to digitalize our business. So on the mortality front, you will recall that we do have a margin built in on the retail products. So that is going to give one a pretty consistent experience variance, all other things being equal, you know, year- to- year. The thing that's more variable is the mortality profits coming out of the group risk business, because that depends critically on the level of pricing going in in the market.
I think it's fair to say that we've seen pricing hold up pretty well in that space. As you're aware, a large chunk of our book is not re-brokered every year because of the distribution channels that that business comes in from. So, you know, we would expect a slight reduction in the mortality experience over, you know, the next six to 12 months, but nothing particularly material in the way of a change in that line item. Is that right, Lotz?
That is correct, Paul.
I'm lucky.
Thanks, thanks, Paul. A follow-up from Mike is around: How does the ARC FS transaction impact the black shareholding of Sanlam Investments?
It doesn't have any impact at all, I don't think, but I'll ask David, who's all over this.
That's correct.
Yeah, zero, zero impact.
Thank you. The next question is from Baron Nkomo from JP Morgan. Given that you aim to be a top three player in your markets, do you intend to allocate a lot more capital for acquisitions in India, as the insurance operations there are quite small versus the larger players in the market?
Yeah. So look, I'm happy to hand over to David on that. But, Baron, we always say we want to be top three in Africa, and we always make the point that India is a... We take a very different position on. You know, India is a massive market, and if you aspire to be top three, I think that is completely out of reach for us in any reasonable timeframe. The... I suspect that in our segment, we probably are in the top three, if not even the top one or two. And I think that's really important. We, as David explained, occupy a very unique niche in India.
We focus very much on the lower part of the pyramid, a more rural and semi-urban strategy, that takes us away from the full force of competition in this space in India, where people focus very much in financial services on the big cities. I don't know, David, if you want to add anything.
Yeah. Thanks, Paul. I mean, I think it's fair to say that we will look to allocate capital where it makes sense, as I indicated earlier. Multiples are very high in India. I think everybody understands the growth vectors there. There's certainly no obligation to put in any capital into any of the businesses, and they're self-funding. So we'll look at it on a case-by-case basis, you know, subject to our normal capital allocation criteria. I think we're certainly likely to put organic capital into some of those smaller business areas that I alluded to, where we see strong growth upside. But in terms of corporate activity around any of the entities, particularly the insurance entities, you know, that'll be a case-by-case, opportunistic basis, depending on what circumstances present themselves in the future.
It might be worth adding, Grant, for Baron's benefit, you know, we don't want to be in the top three in Africa to be in the top three in a football league table. We want to be in the top three, because in those markets, they're small, scale is tricky, and if you're not in the top three, actually, the economics are very challenging. India has got a completely different market structure, a huge degree of fragmentation, and that's true, actually, of most industries there. So it's entirely possible, if you have a good niche, to be a smaller player and still be highly profitable.
... Thank you, Paul. And there's a number of questions just on the Capitec metrics, how much they contribute to new business and EV. But before we go there, just maybe we are on the theme of capital, so I just wanna pick up on a question from Francois du Toit, asking about Allianz buying the Namibian business. The first question is, the valuation is 6.2, how does that compete with embedded value of Namibia? I know that is a slightly more detailed question. I don't know if anyone has notes and answer what of the-
I think David, Lotz and Abigail, all three of them know the answer to that, Grant.
Do you want them to deal with it?
Yeah, I mean, I think we can come back to those more technical questions, later, Francois. I think your next question was around Allianz having the right to increase its stake in the JV to 49% within the next six months. The question is: Does the option expire thereafter? And also, can you discuss the likelihood of the option being exercised and the pricing of the option?
It does expire after six months. It's a limited window. We can't comment on whether other people will exercise an option or not, and it's priced at appraisal value.
Thank you, Paul. Another question from Francois on project expenses. So project expenses reduced quite sharply relative to the second half of 2023. Why did it reduce so sharply, and do you have a project spend budget for the short and long term?
I think Abigail must answer that.
Yes, we do. We do have a project spend budget, and I can say that, our current, project expenses are below budget. We're tracking very well below budget. Why did it reduce relative to last year? I think you'll remember with, particularly with the SanlamAllianz transaction, we were in the early phases of, putting the agreement together and the legal fees, and all that cost. Now that it is live, the project costs have moved more towards integration, the different form. But obviously, legal advisors, relative to, integration type, when you're using your own internal people, that's mainly the biggest driver why some of those project costs have gone down.
Thanks, Abigail. And then, yeah, as I mentioned, a few questions on the Capitec arrangement, if we can disclose their contribution to VNB.
Capitec's contribution to VNB at a group level, it's sitting between 14 to about 19%.
Thanks very much.
At a group level for the first half.
Okay. We have a question from Marius Strydom from Austin Lawrence Gideon. His first question is also related to Capitec, which Abigail has answered. And then, Marius, your next question is around the CSM buildup. I think for those more detailed and technical questions, Marius, we do have a one-on-one session, so if you don't mind, we'll pick it up in that one-on-one session with you, just to explain some of the CSM buildups. Just to see if there are any more questions that have come through. Yeah, there's one now that's come through from Keabetswe Setipane from Mergence Investment Managers. Could you explain which bond yield, the 7.5% hurdle rate on RoGEV is priced off or how the hurdle rate is derived?
Lotz, I think you must deal with this.
Yeah, I can deal with this.
The rest of us just follow you.
Yes, yeah. Thanks very much. Thanks, Grant. So the hurdle rate is based on the nine-year spot bond yield. So, as at December 2023, on which the hurdle for 2024 is based, that was 11.6 , and the hurdle is nine-year bond rate plus 4%, so which gives you a 15.6% annualized and 7.5% for the half year.
Thanks. A follow-up question there is, what is the sustainable RoGEV target range and level we should expect post the bedding down of recent M&A from 2025?
Yeah, Paul will cover that.
Gee, I think this is an answer. This is a question for the CFO.
Obviously, we do look at it to say, depending on the investment, we do look to say, to look at the risk adjustment level. So it's not exactly that it's one RoGEV number across the different regions. Obviously, if you're putting money in a high-risk environment in, let's say, the Pan-African portfolio, relative to putting some money into an established business in South Africa, the South African businesses tend to have a lower RoGEV than we would have in the higher risk, let's say, African portfolio.
Thank you, Abigail. Another question from Francois du Toit from Anchor Stockbrokers. So the question is around group risk premiums. Francois says that the group risk premiums appear to have reduced in our numbers in the first half. I think, Francois, there was some commentary in the report around the reason for the reduction, but I think Francois's question is more around pricing. If we can give any color around pricing of group risk and whether that's had an impact on our numbers.
Yeah, I don't know whether Lots or Abigail want to comment, but you know, there has been a slight reduction in pricing, but not very significant. And this has been a relatively muted growth area of the market. That's it. That's more of it than anything else. Lots, you agree?
Yes, I agree with that. There's nothing more than that.
Thanks, Lotz. There doesn't seem to be any more questions from the webcast. I just want to check on with the moderator if there's any telephone questions. None. None through the telephone. Just back to the webcast. Also, none, no more questions that have come through the webcast. So, with that, I think we leave it there. Paul, any closing comments?
No, just to thank everybody very much for participating, and we look forward to seeing you in our one-on-one engagements over the next few weeks.
Thanks very much.