Santam emerges from insurer Armageddon (largely) unscathed

Earthquakes, floods and fire claims. Santam’s results for the first half of 2023 read a bit like Armageddon, with the insurer losing R150-million to the earthquakes in Turkey and another R150-million to the KwaZulu-Natal floods. 

Clients received a cumulative payout of R14.6-billion in claims during the six months to the end of June 2023 and shareholders saw dividends climb 7% to R4.95. 

Group chief executive Tavaziva Madzinga says insurance growth prospects were dampened by a range of factors that included weak economic growth, pressure on personal disposable incomes, rising interest rates, adverse weather conditions and an increasing cost of reinsurance, among other factors. 

Going forward, the country’s largest short-term insurer does not expect operating conditions to improve in the second half of the year. 

“Economic growth and employment levels will remain suppressed in South Africa, given structural limitations, in particular, [rolling blackouts] and transportation constraints that place severe pressure on economic activity and investor confidence. 

“High interest rates and inflationary pressures will also continue to impact disposable income and claims inflation in South Africa. Under these conditions, competitive pressures will remain at elevated levels,” the company results stated. DM