Santam reports strong first-half performance amid economic challenges and good weather

Santam, South Africa’s largest short-term insurer, reported a strong first-half performance in a benign catastrophe claims environment when compared to the same period last year.

Santam's chief risk officer, Charisse Ras, said in an interview on Monday that in the first half of last year, Santam paid large weather and property-related claims. However, the level of these were much lower currently, although the weather would eventually turn.

The group also benefited from underwriting measures it implemented to tackle high claims inflation and frequency, which helped restore the profitability and earnings momentum of its in-force book.

Tavaziva Madzinga, Santam Group CEO, said these actions contributed to robust growth in gross written premiums (GWP) over the six months, along with an improvement in underwriting margins.

The strong first-half performance exceeded the long-term targets for the 2025 financial year, reporting an 11.3% (June 2024: 6.5%) conventional underwriting margin, GWP growth of 10% (8%), and a 16% (7%) increase in net earned premium.

The group underwriting margin almost doubled to 11.3% from 6.5%, surpassing the 5% to 10% target range. The annualised return on capital was 33.2%, well above the 24% target. MiWay, the direct insurance business, recorded 14% GWP growth and a 10.9% underwriting margin.

The strong performance belied the country’s lacklustre economic growth, no meaningful change in employment levels and increasing pressure on personal disposable income. South Africa is Santam’s key market, contributing 80% to the group’s GWP.

The foundation for accelerating international expansion was laid through the in-principle approval received recently to establish Santam Syndicate 1918 at Lloyd's, which would focus on specialised insurance markets, said Ras.

The insurance results from the participation in parent Sanlam’s Indian and Malaysian businesses increased by 18%. Shriram General Insurance India was the main contributor.

“We remained resolute in executing our strategy, focused in South Africa on retaining our leading position in the broker distribution channel across personal, commercial, and specialist lines of business, while growing market share in the direct channel and under-penetrated consumer segments through strategic partnerships,” said Madzinga.

Headline earnings a share increased by 18.7% to 1 873 cents per share. GWP from the South African market increased by 6% to R16.6 billion, while GWP from outside South Africa grew by 25% to R4.2bn. An interim dividend of 590 cents an ordinary share increased by 10.3%.

The alternative risk transfer businesses grew its profit contribution by 28% to R417m. This was the result of 25% growth in operating earnings to R390m and an increase in investment return earned on capital to R27m.

The Broker and Client Solutions businesses experienced moderated growth in premium rates after addressing areas of underperformance experienced since 2022, but achieved solid GWP growth.

The Partner Solutions business experienced strong growth, supported by device insurance sales at MTN and the first-time inclusion of policies from the recently concluded MultiChoice transaction.

MiWay’s growth accelerated, benefiting from the inbound and tied agency strategies launched in 2023, as well as the MiCashback value proposition launched in 2025.

The Specialist Solutions business experienced a marginal overall decline in GWP, but Engineering and Construction and Agri saw strong double-digit growth. Santam Re achieved double-digit growth based on business written through strategic partnerships.

Both personal and commercial lines delivered solid underwriting margins, with all businesses exceeding the 2024 first-half performance..

The Specialist Solutions business's underwriting results exceeded the comparable period's performance by a sizeable margin. The turnaround in Property persisted.

“As a group, we remain confident in our prospects...We remain cautious, as volatile weather conditions remain a key insurance risk, which may result in volatility in underwriting margins. However, the underwriting actions we have implemented will position us well to manage these potential risks,” said Madzinga.

BUSINESS REPORT