Santam pays record claims of R24.5 billion

03 March 2022 Santam


• Growth of 5% in conventional insurance gross written premiums to R32.7 billion
• Conventional insurance net underwriting margin of 8%
• Net investment income attributable to shareholders of R1.5 billion
• Economic capital coverage ratio of 169% (target range of 150% to 170%)
• Headline earnings per share increased to 2 495 cps (2020: 905 cps)
• R24.5 billion paid in gross claims to policyholders, the highest in company history
• R1.1 billion gross Agriculture claims paid and reserved following adverse weather conditions
• Business interruption gross claims payments pass R3 billion mark
• A final dividend per share of 790c (2020: 0c), and a special dividend per share of 800c declared.

Santam, South Africa’s largest short-term insurance group, today reported that it paid R24.5 billion in claims last year as businesses and individual clients suffered significant losses in an economy struggling to recover from the effects of the pandemic and other setbacks.

The pay-out was the highest in Santam’s history. The R24.5 billion included catastrophe claims from large-scale fires, weather events that significantly affected agriculture and floods in Gauteng and KwaZulu-Natal. At the same time, claims on the motor book and personal lines returned closer to pre-pandemic levels.

The company also played a key role in processing a large number of state-insurer SASRIA’s claims following the July 2021 civil unrest. Santam facilitated payment of R1.1 billion in terms of its mandate with SASRIA.

Presenting the company’s financial results for the year ended 31 December 2021, Group CEO, Lizé Lambrechts said Santam had successfully met considerable challenges in reporting strong operating results for the period.

She said the company’s conventional insurance business achieved acceptable gross written premium (GWP) growth of 5% (2020: 5%) in a depressed economic environment and a net underwriting margin of 8.0% (2020: 2.5%), which is at the top-end of the group’s target range of 4% to 8%.

Headline earnings increased to 2 495 cps compared to 905 cps for the year ended 31 December 2020. A return on capital (ROC) of 28.5% was achieved, well above the 2021 ROC target of 20% and the medium-term target of 24%. The economic capital coverage ratio at 31 December 2021 was 169% (2020: 161%) – at the top end of the target range of 150% to 170%.

Reflecting on the record R24.5-billion paid in gross claims, Lambrechts said: “Over the past five years Santam has paid R101-billion in gross claims. We are very pleased to inject money of this scale back into the economy to help stimulate growth and restore continuity of livelihoods. This is the core purpose of insurance.”

The agri-business was adversely affected by high rainfall and other extreme weather conditions. The division’s claims paid and reserved of R1.1 billion were the highest ever.

“These are strong results and also talk to our ethos of delivering insurance, good and proper. Growth was however a challenge across most of our business units. We do believe that strategic growth initiatives across the group will position us for future growth,” said Lambrechts.

“We experienced a more normalised claims environment compared to the hard lockdown of 2020. The past 12 months were challenging, but throughout it all Santam staff showed resilience and commitment to excellence, which reflects in the results achieved,” she added.

The Alternative Risk Transfer (ART) business reported excellent operating results of R276 million (2020: R165 million), following strong growth in fee income, positive investment results and improved underwriting results. The net insurance result from Santam's share of Sanlam Emerging Markets (SEM) general insurance businesses decreased marginally to R377 million (2020: R381 million).

Net investment income attributable to shareholders, inclusive of the investment return on insurance funds, amounted to R1 493 million (2020: R1 027 million).


The Santam Commercial and Personal intermediated business reported low growth in a severely constrained economic environment. Various new initiatives are, however, showing positive prospects, which should assist in igniting future growth.

The Santam Specialist business achieved improved growth during the second half of the year and gross written premiums in 2021 were in line with the year ended 31 December 2020. Strong growth was achieved in the liability business, while a number of the specialist classes reported improved growth, benefitting from reduced and less stringent lockdown measures. The corporate property business reported much improved GWP premiums for the second half of 2021, despite the decision to cease underwriting business outside of Africa.

MiWay achieved impressive growth of 9% in the current operating environment. Santam Re continued to report strong growth in its third-party business, positively impacted by new business written during the reporting period.

Gross written premiums from outside South Africa, written on the Santam Limited and Santam Namibia licences grew by 6% to R5 284 million (2020: R4 963 million). Strong growth was achieved by Santam Re in Africa, Southeast Asia and the Middle East. It was offset to some extent by the corporate property business no longer underwriting business outside of Africa. The specialist Pan-African insurance business with Sanlam Pan-Africa (SPA) contributed gross written premium of R383 million (2020: R200 million), following strong growth achieved during the second half of 2021. Weak economic conditions resulted in only marginal growth for Santam Namibia.

Gross written premiums in the property class grew by 2% due to strong growth by Santam Re and an improved contribution from the corporate property business in the second half of 2021.

The motor class reported growth of 7%. The strong growth achieved by MiWay and Santam Re was offset by more muted growth of the motor business written by the Santam Commercial and Personal business.

The liability and transportation classes achieved strong growth, supported by both the Santam Specialist businesses and Santam Re. Gross written premiums in the accident and health class contracted by 11%, due to the continued impact of COVID-19 travel restrictions on the travel insurance business.


Santam has made good progress in settling Contingent Business Insurance (CBI) claims. As of end of December 2021, gross CBI claim payments of more than R3 billion, inclusive of the relief payments of R1 billion made in August 2020, had been made. Santam has reviewed its provisions for CBI claims at year-end and reduced the net provision by R450 million. The reduction is mainly due to the actual claims experience to date being lower compared to initial estimates and positive feedback from Santam’s reinsurance panel on its catastrophe reinsurance claim.

Santam experienced a much more normalised claims environment in 2021. The Santam Specialist business was impacted by several large fire claims during the first half of 2021. The very wet summer season also had a negative impact on the Commercial and Personal business and MiWay’s loss ratios.

Santam Re’s performance was affected by its participation on the SASRIA reinsurance programme, following the civil unrest in July 2021. Santam Re has made a financial provision for net reinsurance claims of R237 million at 31 December 2021, based on claims notified to date. The maximum net exposure to the Sasria programme is limited to R315 million.

The motor class achieved satisfactory underwriting performance in the intermediated and direct distribution channels. The motor loss ratio returned to more normalised levels as the claims frequency and severity increased following the easing of lockdown restrictions. MiWay’s loss ratio was significantly impacted by the adverse weather conditions in the fourth quarter but still reported reasonable underwriting results under these conditions, with a loss ratio of 60.9% (2020: 50.6%) and an underwriting profit of R285 million (2020: R486 million).

The crop business experienced significant claims due to hail and excessive rains during November and December. Frost claims in certain regions also contributed to the overall gross claims paid and reserved for the year exceeding R1.1 billion, resulting in a net underwriting loss of R86 million for the crop business in 2021.


The group economic capital requirement at 31 December 2021, based on Santam’s internal model, amounted to R8.3 billion (2020: R7.4 billion) compared to the actual capital of R13.9 billion (2020: R11.9 billion). This equates to an economic capital coverage ratio of 169% (2020: 161%), which is at the top end of the capital target range of 150% to 170%.


Lambrechts said higher expected interest rates and inflationary pressures will decrease disposable income in South Africa.

“The implementation of our FutureFit strategy remains a key focus area. Ecosystems and partnerships with non-traditional players are key to growth and accessing new markets. The growth of cyber insurance and the shift to digital distribution channels are key drivers for insurance growth, with increasing global investment into InsurTech. We will continue to invest in improving our digital end-to-end insurance offering,” she said.

“Among our priorities is the extension of Santam’s leadership position in South Africa and building a specialist Pan-African insurance business with Sanlam Pan Africa, as well as the advancement of our transformation and ESG initiatives,” Lambrechts added.

Santam continued to play a pioneering role in community development with the flagship Partnership For Risk and Resilience (P4RR) increasing the number of municipalities it supported from 54 to 63. The initiative capacitates vulnerable municipalities with technical skills to deal with fire, flood and other risks. In the period under review Santam was also ranked as one of the top 20 employers in South Africa by the Top Employer Institute.

A final dividend per share of 790c (2020: 0c) and a special dividend per share of 800c have been declared.

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