Santam maintains solid performance in low growth environment

3 min read 05 March 2020


Santam – South Africa’s largest short-term insurer – today reported solid operational results for 2019, notching a 7% Gross Written Premium (GWP) growth and 7.7% underwriting margin (2018: 9.2%) for the conventional insurance business, despite the country’s low economic growth and a year-on-year increase in catastrophes and crop damage.

Lizé Lambrechts, the Santam Group CEO, said the group is satisfied with its performance.

“We are pleased with a solid set of results in a year where growth in premiums was challenging due to the strained South African economy. These results reflect the quality and dedication of our people and business partners,” Lambrechts said. 

“Our underwriting margin is at the high-end of our target range of 4% to 8%. Going forward the group will continue focusing on growth, disciplined underwriting actions and managing the risk associated with poor economic conditions,” she added.

Fires, floods and drought devastated various parts of the country during 2019, with Gauteng, KwaZulu-Natal and the Northern Cape taking a particular toll. Lambrechts added that Santam had an opportunity to be a business that not only delivers Insurance Good and Proper, but also creates shared value for generations to come. Santam paid more than R800 million in Agri related claims during the period under review.

“We’ve seen time and again the impact disasters have on the country’s most vulnerable communities. Therefore, we are continuing to focus on entrenching resilience through sustainable partnerships,” Lambrechts said. 


Conventional insurance saw satisfactory growth of 7%. Gross written premiums from outside South Africa written on the Santam Ltd and Santam Namibia Ltd licences amounted to R3.9 billion (2018: R3.4 billion), equating to 15% growth. This was propelled by strong growth in the corporate property and engineering businesses in Africa, as well as in Santam Re in Southeast Asia, India and the Middle East. Weak economic conditions negatively impacted Santam Namibia growth. Continued progress has been made in establishing a Pan-African Specialist Insurance business with Sanlam Emerging Markets (SEM) and the Saham management team in Morocco. 

The group reported a 9% growth in the property class on the back of strong growth in the specialist property business, following lower reinsurance capacity in the market. Crop insurance saw 22% growth in gross written premiums, supported by a change in the mix of farming crop types that increased insured values in South Africa, as well as reinsurance partner business.

The motor class grew by 4%, with MiWay reporting 10% growth (gross written premium of R2.8 billion; 2018: R2.5 billion). The commercial motor intermediated business had strained growth as a result of difficult market conditions.

Several large construction projects outside South Africa benefitted the engineering class, which grew strongly by 20%. The liability class had growth of 5% (2018: 2%), with a focus on improved profitability in a competitive climate.  

Following a difficult start to 2019, with a number of catastrophe events (impact of R334 million compared to R114 million in 2018) and significant insurance crop losses, the business experienced a subdued claims environment for the remainder of the year, resulting in a strong underwriting performance.

The Santam Commercial and Personal intermediated business reported excellent underwriting results, although lower than its exceptional 2018 results. The business benefitted from the new underwriting, administration and product platform as well as disciplined underwriting actions.

The motor class reported strong underwriting performance in the intermediated and direct distribution channels. The MiWay underwriting results were not significantly impacted by the catastrophe events during the period, resulting in an improved loss ratio of 54.2% (2018: 55.2%) and an underwriting profit of R393 million (2018: R334 million).

The property class reported an underwriting result of R212 million, compared to the R519 million reported in 2018, negatively impacted by catastrophe events in South Africa and in Asia.

The Specialist business benefited from the strong underwriting results achieved by the property and engineering classes of business. The liability results improved significantly from the 2018 position, which was negatively impacted by the product recall claims relating to the listeriosis outbreak.

The Specialist business results were negatively impacted by the continued underwriting losses reported by the Trade Credit Business that is in run-off since August 2019. The crop insurance class was negatively impacted by significant hail and frost-related claims resulting in a net underwriting loss of R87 million (2018: net underwriting profit of R54 million).

The Alternative Risk Transfer (ART) business reported excellent operating results of R171 million (2018: R96 million). Centriq and Santam Structured Insurance benefited from increased fee income and improved investment margins. Strong growth was achieved in the risk finance and alternative distribution businesses.

The SEM General Insurance businesses delivered overall acceptable operating results. Shriram General Insurance in India achieved excellent results, which mainly off-set continued high general insurance claims experience in the Saham territories.

Net investment income attributable to shareholders, inclusive of investment return on insurance funds of R1 396 million (2018: R1 105 million) was reported. The improved performance was as a result of fair value gains on financial assets and increased interest income. While 2018 saw a positive movement of R376 million in foreign exchange differences, negligible gains were seen in 2019.

Cash generated from operations increased to R5.8 billion (2018:  R5.5 billion), due to better investment returns realised. Headline earnings amounted to 2069 cps, down by 1% from 2099 cps in 2018.

A 22.2%% return on capital was attained. The economic capital coverage ratio was 160% – at the midpoint of the target range of 150% to 170%.


Santam has embarked on a new strategy for the next five years, aptly called Building a FutureFit Santam. The new strategy will be focused on harnessing technology as a driver of innovation and efficiency, improving human capital capability, growing our leading position in South Africa, expanding Santam’s international business and growing the Pan-African specialist business. 

Lambrechts said the company’s new strategy would see it continue with the commitment to driving positive change through sustained transformation and sustainability.

“The investment market is likely to remain uncertain. The lower interest rate environment will negatively impact investment performance, while the non-rand-denominated investments increase foreign exchange volatility for the group. Santam will continue to assess the risk and implement appropriate responses, guided by our risk appetite,” says Lambrechts.

She added that internationally, working with Sanlam Pan Africa General Insurance on specialist insurance offerings was an exciting opportunity.

The Board of Directors declared a final dividend of 718 cent per share (cps) (2018: 665 cps).