AfroCentric’s long-term ambition remains focused on broadening access to affordable, quality healthcare and enhancing value across the healthcare value chain. While the strategic intent of Vision 2030 remains unchanged, 2025 marked an important turning point for the Group as changing market dynamics and recent developments highlighted the need for greater focus, operational discipline and strategic alignment across the business.
Against this backdrop, AfroCentric is executing its strategy through a health platform model that integrates administration, managed care, pharmaceutical and healthcare services capabilities to deliver improved healthcare outcomes and affordability.
Our strategy is anchored by two core growth drivers:
- Building a winning health offering in partnership with Sanlam
- Strengthening our managed care leadership through clinically driven innovation
Investing in data, digital and technology
Evolving our culture and operating model to support the growth strategy
We aim to deliver long-term value through innovation, digital transformation, and a cohesive operating framework, directly contributing to SDG 3 and NDP Goal 8, prioritising access to high-quality, affordable healthcare for all South Africans.
As part of the Sanlam Group, AfroCentric in partnership with Fedhealth is well positioned to deliver an integrated, holistic offering that aligns financial, wellness and medical services. In line with Sanlam’s evolving health strategy, increased emphasis is being placed on a broader health platform approach, designed to enable participation across multiple schemes, employers and individuals through scalable distribution, rewards, digital capability, administration and managed care, rather than reliance on a single scheme outcome.
Performance
Central to this strategy is AfroCentric’s partnership with Sanlam. Alignment across strategy, distribution and operating models has strengthened the Group’s ability to deliver integrated healthcare and financial wellbeing solutions to employers, individuals and medical schemes.
Key developments during the year included:
- Selling AfroCentric Distribution Services to Sanlam to form Sanlam Health Distribution to focus on health distribution and expand access to Sanlam’s broader distribution platform
- Expanding the health platform proposition through initiatives such as Health Rewards by Sanlam for Fedhealth members, promoting digital health engagement and incentivising healthy behaviour
- Delivering improved administration and managed care services to more than four million medical scheme beneficiaries through Medscheme’s operating platform
As a leading managed care organisation, clinical innovation remains a key differentiator for AfroCentric. The Group aims to transition traditional healthcare delivery models towards value-based care, with a stronger focus on healthcare outcomes, preventative care and improved member experiences.
Leveraging Medscheme’s clinical expertise, Sanlam’s risk management capabilities and strategic partnerships across the healthcare ecosystem, the Group continues to develop integrated healthcare solutions that place scheme members at the centre of care delivery.
Performance
Key developments during the year included:
- Advancing value-based care through coordinated care pathways, multidisciplinary provider engagement and outcomes-based contracting models
- Launching the Orthocare Spinal Programme in January 2025 for selected schemes, introducing a multidisciplinary rehabilitation pathway for chronic lower back pain aimed at improving functional recovery and reducing unnecessary surgery
- Strengthening collaboration between Medscheme’s clinical teams and Scriptpharm’s pharmaceutical risk management capabilities, enhancing the Group’s integrated pharmacy benefit management model
- Establishing the groundwork for digital enablement of value-based care for diabetes (focusing on smart screening and risk stratification, intervention enrolment and medicine adherence)
We are committed to strengthening our leadership in healthcare by leveraging data-driven insights and adopting new technologies. By investing in data analytics, digital tools, and technology, we aim to improve operational efficiency and enhance the healthcare experience for our clients, empowering them with seamless digital solutions.
Performance
Digital and data capabilities are foundational to AfroCentric’s ability to scale cost-effective healthcare delivery and support outcomes-based care models.
Key developments during the year included:
- Relocating the Group’s data centre infrastructure to Sanlam’s facilities in Cape Town, improving infrastructure resilience and system stability
- Advancing the Group’s data modernisation programme, strengthening governance frameworks and enterprise data architecture
- Enhancing data capabilities to support improved decision-making, risk management and coordination across the healthcare journey
- Continuing to expand digital engagement platforms to enable more seamless interactions between members, healthcare providers and intermediaries
A key enabler of AfroCentric’s strategy is the continued evolution of its culture and operating model. The Group seeks to foster innovation, collaboration and continuous learning while creating an inclusive environment that supports diversity and maximises employee potential.
This approach supports the development of a cohesive and integrated operating model that leverages the strengths of AfroCentric’s diversified healthcare capabilities.
Performance
During the year, the Group implemented targeted organisational and structural changes to strengthen execution capability, governance and leadership accountability.
Key initiatives included:
- Realigning AfroCentric Technologies with core business activities and moving infrastructure to Sanlam Group Technology to improve stability and resilience
- Strengthening alignment with the Sanlam ecosystem to support a more integrated health platform across administration, managed care, distribution and technology
- Enhancing enterprise governance and risk oversight through leadership appointments, including the appointment of a Chief Risk Officer
- Continuing to embed an integrated operating model across administrative, clinical and pharmaceutical capabilities
AfroCentric enters 2026 in a fundamentally different operating context. The outcome of the Bonitas RFP process represents a significant strategic and execution inflection point for the Group. These developments challenge some of the assumptions underpinning Vision 2030, particularly regarding the pace and sequencing of scale, investment and integration required to build a winning health offering. The strategy will therefore be recalibrated to address concentration risk, operate within a tighter capital envelope and reflect the practical constraints created by these developments.
Against this backdrop, management’s priorities for 2026 are clear and execution-focused:
- Cost reset: Delivering a structural reduction and simplification of the cost-to-serve to align with the new revenue base (excluding Bonitas)
- Protecting the core business: We continue to serve 3.3 million lives while ensuring the enablement structure is fit for the revised revenue base
- Reorganised operating model: Establishing a lean, accountable structure designed to protect the existing client base
- Portfolio simplification: Focusing on core capabilities and removing organisational complexity that no longer provides value or impact in the new operating reality
Service excellence remains non-negotiable and will be protected through disciplined operational execution and continued investment in the systems, processes and capabilities that support client outcomes.
Improving the sustainability of the pharmaceutical cluster also remains a priority. Management is focused on stabilising profitability through:
- Active management of margin pressures by leveraging digital tools and robotic medication dispensing to lower transaction costs and offset the impact of declining private script volumes and right-sizing organisational structures
- Optimised working capital management through executing stricter inventory protocols, specifically reducing stock holdings within the private pharmacy and Activo businesses
- A sharper focus on the most appropriate product lines and contracts, simplifying its portfolio through the disposal of the Activo Group and concentrating resources on high-margin product lines and the most viable remaining contracts
- Continued scale and impact through Pharmacy Direct’s participation in the public-sector CCMDD programme. Pharmacy Direct continues to serve as a critical strategic partner to the Department of Health, expanding its reach to 2.4 million patients and delivering 1.4 million scripts monthly
Regulatory developments continue to shape the healthcare landscape and require agile strategic responses. These include ongoing discussions on the NHI Act and the CMS Low-Cost Benefit Options report, which recommends phasing out primary health insurance products.
Despite these challenges, the Group’s core business remains sound and competitive. AfroCentric’s diversified healthcare assets, strong partnerships and prudent capital management provide a solid foundation to respond to market shifts and pursue new opportunities.
The Group remains committed to strengthening an integrated healthcare value proposition that leverages its clinical, administrative and pharmaceutical capabilities in a more cohesive and scalable way, ensuring the continued delivery of sustainable value to shareholders.