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Santam’s 2030 growth strategy is tracking ahead of targets, with South Africa’s largest short-term insurer looking to diversify its earnings outside its home market.This earnings diversification took shape in the six months ended June, with gross written premiums (GWP) outside South Africa hitting the 23% mark — against a target of 20%.The rest of the GWP, amounting to R17.8bn, came from the South African market, the group’s anchor market, accounting for 77% of GWP in the period.One of the transactions pursued by the group to advance its internationalisation strategy was a syndicate deal it struck with Lloyd’s, which gave birth to Santam Syndicate 1918, which officially commenced underwriting in January.The syndicate started on the front foot, concluding new incremental business with an earned premium income of R1.3bn.Santam CEO Tavaziva Madzinga said the syndicate has a promising pipeline and additional approved capacity from Lloyd’s for the remainder of 2026. “Most of the additional business to be written will only be recognised as earned revenue in 2027 and 2028 due to a delayed revenue recognition pattern, while the related Lloyd’s market cost and fixed costs will be recognised in 2026,” Madzinga said.“This, together with an expansion in the staff complement of the Syndicate in support of future growth, will increase its anticipated operational loss for 2026 to approximately R450m to R550m, dependent on the volume and type of business written. “The new business is expected to contribute meaningfully to earnings in future financial years, with break-even on a monthly basis still anticipated in 2027.”The group’s alternative risk transfer businesses grew their profit contribution by 12% to R466m in the six months under review, while MiWay, Santam Direct, Santam Re and Santam Partner Solutions also reported double-digit growth in the period.The underwriting performance for the period was adversely affected by catastrophe claims and other large losses, mostly fire, including floods in Limpopo and Mpumalanga early in the year and the severe weather in the Western Cape during May.The group reported a 7% increase in headline earnings. “This performance reflects disciplined underwriting, sound expense management, and continued strategic progress of our FutureFit 2030 goals. More importantly, key performance indicators remained in line with or exceeded long-term targets,” said Madzinga.“As a business we remain focused on pricing discipline, risk selection, expense efficiencies, and execution of the FutureFit 2030 strategy. We are also confident in the group’s prospects and the potential to deliver enhanced growth and profitability, as our FutureFit 2030 strategy has been tailored to persist in the prevailing operating environment.”Business Day
