Santam delivers strong Gross Written Premium Growth and Resilient Net Insurance Results

02 March 2023 Santam


• Growth of 8% in conventional insurance gross written premiums to R35.4 billion
• Conventional insurance net underwriting margin of 5.1%
• R29.8 billion paid in gross claims to policyholders,
• A return on capital (ROC) of 18.8% was achieved,
• Economic capital coverage ratio of 156% (target range of 145% to 165%)
• Cash generated from operations increased to R10 billion (2021: R3 billion),
• A final dividend per share of 845c (2021: 790c).

Santam, South Africa’s largest short-term insurer, has achieved Gross Written Premium (GWP) growth of 8% (2021: 5%) for the group’s conventional insurance business and a net underwriting margin of 5.1% (2021: 8%), for the year ended 31 December 2022.

The net underwriting margin was at the bottom end of the group’s target range of 5% to 10%. Adverse weather conditions in the first three months of the year and the devastating floods in the KwaZulu-Natal province during early April 2022, significantly impacted the underwriting results. Other contributing factors to the lower underwriting margin were increased claims inflation, which escalated ahead of premium increases, higher than expected large fire losses and an increase in power surge and crime related claims. These were offset to some extent by a reduction in the COVID-19 related contingent business interruption (CBI) claims provisions.

In the period under review Santam paid R29.8 billion (2021: R24.5 billion) in gross claims, ensuring that policyholders impacted by catastrophes and other difficulties were compensated.

“The 2022 financial year was one of the most challenging underwriting periods in Santam’s history, combined with a turbulent investment market environment. Despite these headwinds, we reported strong gross written premium growth and resilient net insurance results,” said Tavaziva Madzinga, Santam’s Group CEO.

The alternative risk transfer (ART) business reported excellent operating results, net of non-controlling interests, of R306 million (2021: R276 million), positively impacted by strong growth in fee income and positive investment and underwriting results.

Headline earnings decreased to 1 826 cps compared to 2 495 cps for the year ended 31 December 2021 due to the weaker operating results and lower investment returns attributable to shareholders, with the latter reflecting the subdued investment market performance.

A return on capital (ROC) of 18.8% was achieved, below the ROC target of 24%, however a significant improvement on the 7.4% reported for the first six months of 2022, following improved underwriting and investment performance in the second half of the year. The economic capital coverage ratio at 31 December 2022 was 156% (2021: 169%) – above the midpoint of the target range of 145% to 165%.


The Santam Commercial and Personal business reported good growth in GWP compared to 2021, specifically in commercial lines and Santam Direct. The Santam Specialist business overall achieved strong growth with the crop, travel, liability, marine and corporate property insurance businesses, being the main contributors. The growth in the crop business was mainly due to increased commodity prices.

MiWay recorded subdued growth of 2%, following deliberate focus on profitability, which impacted on new business growth. The impact of low premium increases during 2021 and increased premium defaults in 2022 also contributed to lower growth in the existing book of business. Management is confident that the current focus on growth initiatives should improve growth prospects for 2023.

Santam Re achieved acceptable growth in its third-party business, positively impacted by new business written during the reporting period and a general increase in reinsurance premium rates globally.

Gross written premiums from outside South Africa, written on the Santam Ltd and Santam Namibia Ltd licences grew by 3% to R5 462 million (2021: R5 284 million). Strong growth was achieved by Santam Re in the Middle East, offset to an extent by fewer large engineering projects written in the rest of Africa. The collaboration with Sanlam Pan-Africa (SPA) across the African continent in specialist business continues to yield positive results, with excellent gross written premium growth of 50% to R574 million (2021: R383 million), following solid growth achieved during 2022 in the corporate property and crop businesses. Santam Namibia recorded acceptable growth of 5%.

Gross written premiums in the property class grew by 8% due to strong growth by Santam Re, as well as solid contributions from the corporate property business as well as the Santam Personal and Commercial intermediated business.

The motor class reported growth of 5% following good growth achieved by Santam Re and the Santam Commercial and Personal intermediated business, offset to some extent by subdued growth from MiWay.


The process of finalising the remaining CBI claims and associated reinsurance recoveries relating to the COVID-19 lockdown continued steadily. Santam reviewed its provisions for CBI claims at the end of December 2022, considering the claims experience and reinsurance recoveries to date.

Following this review, Santam reduced its net provision for CBI claims by a further R317 million, following the reduction of R397 million accounted for in the June 2022 results. The reduction is mainly due to the actual claims to date being lower than initial estimates. There remains some marginal uncertainty about the ultimate liability, which will only be eliminated once the process has been finalised.

The Santam Commercial and Personal (C&P) business underwriting results were significantly impacted by the adverse weather conditions during the first quarter, the KZN floods in April, high claims inflation and a significant increase in motor theft and power surge claims.

The Santam Specialist Business achieved significantly improved underwriting results during the second half of 2022. The crop, liability, engineering, and travel insurance businesses reported excellent results while the corporate property business also achieved a positive net underwriting result despite significant claims exposure to the KZN floods.

MiWay recorded an underwriting profit of R284 million, in line with 2021. Underwriting actions, which included claim efficiencies, segmented premium increases and adjusted risk covers, started to gain traction after the interim reporting period.


Towards the end of 2022 Santam concluded a strategy refresh process, which is aimed at understanding, acquiring and servicing our customers better through the enhanced use of data as well as a more focused operating model. The new strategy will ensure Santam connects with policyholders through a shift to a focused multi-channel approach complemented with ecosystem adjacencies and partnerships at scale.

“The commercial and personal multi-channel business was restructured into three business units to focus on the distribution channels where we interact directly with clients, another on brokers and the third on partnerships. The other customer-facing businesses - MiWay, Santam Specialist and Santam Re will continue to operate as before and provide growth and diversification benefits. We will also have a business unit focussed on managing our shared services in a coordinated manner to achieve enhance efficiency and delivery to our customer-facing business units. Our operating model changes took effect from 1 January 2023,” said Madzinga.

Santam expects trading conditions in South Africa and globally to remain very competitive. The company also anticipates high interest rates and significant inflationary pressures to continue to decrease disposable income in South Africa.

“It is our view that economic activity will, in the short to medium term, be constrained by weak consumer spending. The high inflation environment also puts pressure on claims costs, while the ongoing loadshedding will negatively impact economic growth. We are facing a significant increase in reinsurance premium rates, following several large global and local catastrophe events. We have implemented a number of underwriting actions to mitigate these challenges, which positions us well for future growth,” said Madzinga.

A final dividend per share of 845c (2021: 790c) has been declared.

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