Johannesburg - South African insurer Santam
[JSE:SNT] reported a 51% jump in full-year profit on Tuesday, helped by a recovery in underwriting, and said it expects underwriting margins to decline.
Santam, South Africa's largest property and casualty insurer, said diluted headline earnings per share (EPS) totalled 1 343 cents in the year to end-December compared with 889 cents a year earlier.
The results were widely expected after Santam said last month it expected headline EPS to rise by as much as 55%.
Santam, which is majority owned by life insurer Sanlam
[JSE:SLM], said it was helped by a recovery in its underwriting business and few large industrial accidents and fires.
The company said net insurance premium revenue totalled R13.5bn, compared with R12.9bn a year earlier.
South African insurers have begun to recover after being hit hard by a 2009 recession that led to a million job cuts and ballooning household debts, causing customers to lapse on policy payments.
The sell-off in equity markets after the global economic crisis hit investment portfolios.
Santam said it expected underwriting margins to decline to a range of 4% and 6% in 2011 due to the weakening rand and higher claim costs after floods spread across the country earlier this year.
Life insurer Liberty Holdings
[JSE:LBH] last week reported a surge in full-year profit as fewer of its customers lapsed on payments.
Shares of Santam were down 0.83% by 14:14, compared with a 0.2% fall in Johannesburg's All-share index.