Publications
Partners
Cape Town - Santam’s results to 31 December 2013 show growth of 9% in gross written premiums (excluding cell insurance business).
Headline earnings grew by 4% and headline earnings per share was R10.33 compared to R9.95 for the prior year.
A final dividend of R4.33 per share was declared, up 5.6% on 2013.
Cash generated by operations was R1.6bn compared to R2.4bn in 2012.
The group solvency ratio is at 42%, within the 35% to 45% target range of the S&P International Rating A-.
There was a return on capital of 20%.
During the period over R13bn in claims were paid.
Santam said it could deliver these results in spite of continued tough underwriting conditions, characterised by several significant adverse weather events exacerbated by the sharp decline in the rand-dollar exchange rate.
The rand dollar exchange rate depreciated by 24% over the year. This placed significant strain on the motor insurance book as the weaker rand directly affects the cost of claims.
In announcing its results, Santam noted that the combination of poor GDP growth and historically low interest rates were the additional adverse factors in a tough trading environment in 2013.
Total gross claims from these catastrophe events for the Santam group exceeded R400m, the second consecutive year to surpass that threshold.
"Our biggest challenge in 2014 will be to balance growth and profitability and return to the target margin. We expect sluggish economic growth and continued rand weakness for the 2014 financial year and uncertain investment returns, driving even more focus on the improvement of underwriting margins," said Santam CEO Ian Kirk.
In June 2013 Santam concluded the acquisition of a 100% interest in Travel Insurance Consultants (TIC) for R95m.
Santam also acquired a 40% interest in Western Group Holdings, a short-term insurance business, from PSG Konsult for R88m in September 2013.
"Looking ahead, the reality of the depreciating rand, increasing fuel, energy and food prices coupled to the need for us to increase premiums continues to make it a tough environment for the South African consumer and for our business,” said Kirk.
“However, despite the financial strain on clients, we are positioned to manage these premium increases selectively through our market and risk segmentation approach.”
“There is also increased risk on the ground at the municipality level and insurers face rigorous regulatory pressures. However, we remain confident in our ability to execute our strategy through continued diversification, effective underwriting and investment management,” concludes Kirk.
Headline earnings grew by 4% and headline earnings per share was R10.33 compared to R9.95 for the prior year.
A final dividend of R4.33 per share was declared, up 5.6% on 2013.
Cash generated by operations was R1.6bn compared to R2.4bn in 2012.
The group solvency ratio is at 42%, within the 35% to 45% target range of the S&P International Rating A-.
There was a return on capital of 20%.
During the period over R13bn in claims were paid.
Santam said it could deliver these results in spite of continued tough underwriting conditions, characterised by several significant adverse weather events exacerbated by the sharp decline in the rand-dollar exchange rate.
The rand dollar exchange rate depreciated by 24% over the year. This placed significant strain on the motor insurance book as the weaker rand directly affects the cost of claims.
In announcing its results, Santam noted that the combination of poor GDP growth and historically low interest rates were the additional adverse factors in a tough trading environment in 2013.
Total gross claims from these catastrophe events for the Santam group exceeded R400m, the second consecutive year to surpass that threshold.
"Our biggest challenge in 2014 will be to balance growth and profitability and return to the target margin. We expect sluggish economic growth and continued rand weakness for the 2014 financial year and uncertain investment returns, driving even more focus on the improvement of underwriting margins," said Santam CEO Ian Kirk.
In June 2013 Santam concluded the acquisition of a 100% interest in Travel Insurance Consultants (TIC) for R95m.
Santam also acquired a 40% interest in Western Group Holdings, a short-term insurance business, from PSG Konsult for R88m in September 2013.
"Looking ahead, the reality of the depreciating rand, increasing fuel, energy and food prices coupled to the need for us to increase premiums continues to make it a tough environment for the South African consumer and for our business,” said Kirk.
“However, despite the financial strain on clients, we are positioned to manage these premium increases selectively through our market and risk segmentation approach.”
“There is also increased risk on the ground at the municipality level and insurers face rigorous regulatory pressures. However, we remain confident in our ability to execute our strategy through continued diversification, effective underwriting and investment management,” concludes Kirk.
