New Lloyd’s syndicate signals shift in SA risk placement
The big news to rock South Africa’s insurance market late July 2025 is that Santam, the country’s largest non-life insurer, has been granted in principle approval to launch a UK-based Lloyd’s syndicate. Brokers and corporate risk advisers struggling to place complex risks or chasing cover that has fallen out of favour among local insurers will be watching the insurer’s global expansion with interest.
Approval process and timelines
In its JSE SENS announcement to shareholders, Santam said the launch would be subject to meeting the predetermined start-up operational requirements of Lloyd’s, with final approval and “permission to underwrite” expected in the final quarter of 2025. The initiative has already received the relevant regulatory approvals within South Africa. Branded as Santam Syndicate 1918, in honour of the insurer’s founding year, this move into the London market is being positioned as an international diversification play.
Large commercial and multinational brokerages should be familiar with the London market, as it plays a significant role in the global property and casualty (P&C) space. It operates as a partially mutualised marketplace, within which multiple members, through syndicates, provide capital and accept insurance risks. In total, Lloyd’s represents around 8% of global commercial premiums and provides access to over 200 territories. The US and Canada account for 53% of its global premium, followed by the Eurozone (15%); UK (10%); Asia Pacific (10%); and Latin America (7%). Africa is included in the 5% ‘rest of world’ total.
So, why join the market after all these years? The primary motivation appears to be to meet the insurer’s international expansion objectives, which stand out as one of the best opportunities to achieve its key strategic objective of accelerated growth. In brief comments to FAnews, an executive at a multination brokerage, who preferred to remain anonymous, said the move likely serves to underline Santam’s position as the leading SA Insurer in addition to the role of SanlamAllianz as a leading transcontinental player.
If all goes to plan, the business will kick off in earnest from 1 January 2026, with forecast gross written premium (GWP) in the first year of GBP300-400 million. Santam Group CEO Tavaziva Madzinga said Lloyd’s provides an efficient and scalable platform to advance Santam’s business goals and access new markets.
Developing a skills and talent pipeline
The move will give Santam access to the best insurance talent in the world, as well as facilitate the development of the insurer’s home-grown talent. A London-based team is being assembled with deep Lloyd’s market experience and a proven track record in the syndicate environment, supported by managing agent Asta and Santam’s own specialist division in South Africa.
A presentation given by Madzinga and Santam Group CFO, Wikus Olivier, went into some detail on the opportunity and benefits of the arrangement, alongside the expected impact. The first comment in the opportunity ‘box’ was that this launch would help achieve the group’s ambition of generating more than 20% of group GWP offshore by 2030. They confirmed that the insurer would gain access to global specialty and reinsurance markets, and benefit from licences that open up trade in 77 insurance and 200 reinsurance markets worldwide.
Santam has firmly positioned the Lloyd’s syndicate initiative as complementary to its South African operations. In response to a question from FAnews, Gareth Beaver, CEO of Santam Specialist Solutions, confirmed that the group remains committed to supporting the local broker market.
A firm commitment to SA brokers
“The Lloyd’s syndicate will serve as a vehicle for our international expansion and diversification and is complementary to our South African presence. Our commitment to South Africa and local brokers remains, i.e. we continue to grow and maintain our leadership position in South Africa and the rest of Africa. The Santam Specialist Solutions business will continue with its growth and strategic ambitions but complemented by a London-based vehicle that provides access to further opportunities.”
Beaver added that Santam Syndicate 1918 has entered the ‘Making It Happen’ phase with Lloyd’s and is working to accelerate the operational aspects required to obtain permission to underwrite before year-end. “This will include defining the distribution model for the syndicate and ensuring that there are the appropriate channels to place business in the syndicate via the South African specialist distribution network,” he said. “Further communication will follow as we progress through this phase of the project.”
Solvency cracked a brief mention in the presentation, though indirectly. According to Santam, Lloyd’s syndicates benefit from the market’s strong credit ratings (from A.M. Best, S&P and Fitch) and its capital-efficient structure. The broker we spoke to said that access to Grade A paper obviously helps the cause where there is a need to show such rating. Other benefits include an extensive distribution network, and a governance model designed to promote stability, responsible operations and good outcomes for all market participants.
Key metrics to underwrite by
The Santam Syndicate will also seek to outperform some of the main metrics delivered across the group. The expected syndicate underwriting margin of 10% or better compares to the 5-10% target for the group, while the return on capital in hard currency matches the group’s hurdle rate of 24%. “Whilst initially dilutive due to the delayed recognition of premium written, the syndicate will be accretive over the medium to long term,” the presenters said.
According to the presenters, the insurer will lean on the syndicate to reinsure its existing specialist business, focusing on growing in lines of business that it already understands. Returning to the solvency issue, Santam has indicated it will issue an additional R1 billion in subordinated debt during 2025 to maintain South African regulatory capital ratios and manage the impact on group capital. Overall, the insurer expects to remain within its own capital coverage ratio range of 145-165%.
In addition to its commercial aims, Santam has committed to embedding a culture of diversity and inclusion at the syndicate, with opportunities for knowledge sharing, secondments and talent mobility between South Africa and the London market. The initiative will broaden skills and foster deeper Lloyd’s expertise across the group.
A transformational step
“The establishment of our own London market insurance operation gives our business a solid foundation for continued international growth and diversification,” Madzinga said. “This is a transformational step in our 107-year history, [and] we are very excited about our partnership with Lloyd’s and the expansion opportunities into new territories and classes that the new syndicate will offer.” He added that the London market was a global hub for insurance business, innovation and talent.
“The African continent is undergoing significant development and represents a huge opportunity for our industry to facilitate economic progress, impact and resilience,” said Dawn Miller, Chief Commercial Officer of Lloyd’s and CEO of Lloyd’s Americas. “We look forward to welcoming Santam as the leading property and casualty insurer in Africa as they utilise Lloyd’s as a platform for international expansion by unlocking its global licences and excellent financial strength.”
“This move will enhance Santam’s position where brokers are looking to place the lead or leading shares on larger accounts in the London market,” our broker said. “It broadens Santam’s role outside of South Africa where they already have a dominant position and find it difficult to grow to the extent they need to; on their current business they need to grow the equivalent of a medium size insurance company each year.”
Writer’s thoughts:
Entering the London market seems like a no-brainer for insurers underwriting complex risks in Africa. Has the Santam Syndicate announcement sparked any offshore ambitions at your business? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
