Santam, South Africa’s largest short-term insurer, more than doubled its interim profit for the six months ending in June, reaching R1.37bn.
- The company warned that operating conditions are not expected to improve in the second half, citing structural limitations, electricity supply issues, and transport constraints that place pressure on economic activity and investor confidence.
- High interest rates and inflationary pressures are also anticipated to impact disposable income and claims inflation in South Africa, contributing to elevated competitive pressures.
- Santam’s gross written premium (GWP) grew by 7% year on year, with South Africa remaining its largest region, accounting for over four-fifths of GWP.
- Insurance revenue increased by more than 10% to R22.5bn, while gross claims paid out amounted to R14.6bn.
- Santam’s diversification across market segments, insurance classes, and geographies contributed to its strong performance.
- The company faced challenges in 2022, including low economic growth, high unemployment, flooding, increased claims inflation, and power surges, fire, and crime-related claims.
Despite the struggling economy and a competitive local insurance market, Santam remains resilient but anticipates ongoing difficulties in the operating environment. Load-shedding and weather-related events have further increased the potential impact on claims. Nevertheless, Santam’s strong interim profit growth reflects its ability to navigate challenging conditions and maintain its position in the market.