South Africa: Santam's insurance profits soar by 58% following strategic growth moves

Zawya

04-03-2025

Leading short-term insurer Santam released its financial results on Monday, 3 March 2025, highlighting a year of robust growth and strategic expansion. The company's strong premium growth, improved underwriting, solid investment returns, and disciplined cost management all contributed to a highly successful 2024 financial year.
Santam's continued focus on market expansion and operational efficiency has reinforced its position as a key player in the insurance sector, demonstrating resilience in an evolving economic landscape.
Santam's financial results showed a 10.5% increase in gross written premium, surpassing the insurer's long-term targets. The company also reported a significant improvement in its underwriting margin, rising to 7.6% from 3.5% the previous year. This growth was largely driven by the turnaround of Santam's property portfolio, which became profitable after years of losses. Higher premiums and better risk selection played a key role in this recovery.
Additionally, Santam noted that strategic pricing adjustments and policy condition changes helped mitigate the impact of elevated claims resulting from extreme weather events.
Santam reported a 13% increase in net income, driven by strong underwriting performance and solid investment returns.
Strategic growth boosts
Santam also benefited from strategic expansions over the past year, which contributed to its strong performance. The insurer's business outside South Africa grew by 28%, now accounting for 18% of total gross written premium. A key highlight was the success of its MTN device insurance offering, which outperformed expectations and exceeded its original business plan. Additionally, MiWay delivered a strong turnaround, achieving a double-digit underwriting margin.
Strong capital returns
Santam reported a capital coverage ratio of 166%, slightly exceeding its target range of 145% to 165%. During the period, the insurer maintained tight control over expenses and capital management, ensuring operational efficiency.
Santam declared a final dividend of 985 cents per share, marking an 8.8% increase from the previous year. This brings the total ordinary dividend distribution to 1,520 cents per share.
The insurer achieved a return on capital of 32%, well above its 24% target, benefiting from favourable market conditions both locally and internationally. Overall, total net income rose to R3.68bn, up from R3.25bn the previous year.
Santam's conventional insurance profit surged by 58% to R4.6bn, while profits in its alternative risk transfer business climbed 51%.
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