Santam results boosted by improved underwriting conditions

Santam, which is celebrating its 100-year anniversary in 2018, advised on Monday that expects its headline earnings per share for the six months ended June 2018, to be between 69% and 75% higher than in 2017.

South Africa’s largest general insurer said it expects HEPS to be between 1,000 and 1,040 cents per share, versus 593 cents per share during the same period a year ago.

Earnings per share (EPS) is also expected to be between 1,000 and 1,040 cents per share (2017: 683 cents) which is between 46% and 52% higher, it said.

“The increase in HEPS and EPS has been driven by significantly improved underwriting results compared to the six months ended June 2017,” Santam said.

“The net underwriting margin is expected to be slightly above the long-term target range of 4% to 8% of net earned premiums due to improved underwriting conditions during the reporting period.”

Santam expects to publish its results on 30 August 2018.

In March, Santam noted that it paid out R19 billion in claims in results to the end of 31 December 2017.

The results, it said, followed a year impacted by major disasters which included the devastating Knysna fires, floods in Durban and hailstorms in Gauteng.

“As a consequence of these and other claims events, Santam paid out R19 billion (2016: R16 billion) in claims during the year under review, with R823 million paid out in claims for the Knysna fires. The total claims paid relating to the Durban and Gauteng disasters amounted to R1.1 billion.”

“The Knysna fires were one of the worst disasters in South Africa in more than a century. This, coupled with the devastation wreaked by severe weather in Durban and Gauteng, tough economic conditions and a surge in claims, made for a very difficult year.

“In the face of all these challenges, our business proved its resilience and ability to maintain growth, living up to our brand promise of delivering insurance good and proper,”said Lizé Lambrechts, Santam CEO.

MiWay, Santam’s wholly-owned subsidiary contributed an underwriting result of R317 million (2016: R178 million).

Read: The best and worst short-term insurers in South Africa – including Discovery, Santam, Hollard, and Outsurance

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Santam results boosted by improved underwriting conditions