Johannesburg - South Africa's biggest short-term insurer, Santam [JSE:SNT], said on Wednesday that overall underwriting performance for the year to date remained "very pleasing" with all major business units performing well.
In an update to shareholders, the group said the turnaround of both the corporate and portfolio management business units achieved in the first half continued for the year to date.
"The results of the former were positively influenced by the low frequency of large industrial accident and fire-related claims. Crop
insurance results are under pressure due to weather related claims," it said.
In general rates remain soft and premium growth is expected to be in line with the overall industry experience," the group stated.
Santam's financial year ends on December 31.
Performance of the investment portfolio was in line with the strengthening of equity markets and the investment result has also been
positively impacted by the accounting treatment of the derivative fence structure that existed at 31 December 2009, the group said.
Following payment of the interim and special dividend the group retained ts equity portfolio intact and hedged approximately 60% of its equity exposure by means of derivative fence structures from early September onwards, it said.
"Interest rate returns, albeit lower than last year, continue to contribute positively to income mainly due to higher cash and float levels. The group's solvency margin comfortably remains within the target range of 35% to 45%," it said.
It cautioned that headline earnings continue to be susceptible to the inherent volatility of underwriting and investment activities.
The group's next set of results will be the audited abridged financial results for the 2010 financial year, to be published on 1 March 2011.