Santam reports strong financial performance amid challenging conditions

Santam, the JSE-listed short-term insurance group, delivered a strong performance in the three months to March 30, exceeding its longer-term financial performance indicator targets.

The group directors said in an operational update that double-digit growth in gross written premiums, an underwriting margin above the upper end of the 5% - 10% target range, and annualised return on capital in excess of 30%, were pleasing.

However, the “operating environment in South Africa…remained challenging. Low economic growth and pressure on personal disposable income continued to dampen growth prospects, aggravated by the persistent deployment of insurance capacity in specific lines of specialist business at unsustainable rates,” they said.

Emerging global geopolitical tensions had suppressed business and consumer confidence.

“However, the group's FutureFit 2030 strategy is geared towards operating under challenging conditions,” directors said.

They said diversification across market segments, insurance classes, and geographical reach stood the group in good stead. Various underwriting actions over two years bore positive results.

The conventional insurance business saw gross written premium growth of 11%, with solid contributions from all businesses. Highlights include double-digit growth at MiWay, the combination of good growth in business insurance, and acceleration in personal lines new business.

Santam Re saw strong double-digit growth, supported by whole-account quota share business from strategic partnerships.

In Specialist Solutions, casualty lines achieved muted growth amid aggressive pricing, and Agri business volumes declined due to inherent timing differences early in the year.

Favourable attritional loss experience and an absence of significant loss events year-to-date also contributed to the performance. The overall underwriting margin was a big improvement on the comparable period.

The investment return earned on the capital portfolios was below expectations. This was mainly due to foreign currency translation losses on the foreign exposure in the portfolio following a strengthening of the rand.

Investment market performance is expected to remain volatile and uncertain. The interim results are expected to be released on September 1, 2025.

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