Santam hammered by worst natural catastrophe in its history.

The net underwriting margin for conventional insurance was 2.3% (June 2021: 6.7%), below the group’s target range of 5% to 10%. A significant contributor to the underwriting results were the devastating floods that affected KwaZulu-Natal (KZN) during April 2022. These were, however, offset to some extent by a reduction in the COVID-19 related contingent business interruption (CBI) claims provisions. The current estimate of Santam’s gross exposure to the KZN floods is R4.4 billion, however, significant adjustments to gross exposures may still occur. The company’s reinsurance programme has provided effective protection against this natural catastrophe, limiting the net impact to R566 million, including reinsurance reinstatement premiums. The KZN floods were the most significant natural catastrophe in Santam’s history.

During the period, headline earnings decreased to 409 cps (June 2021: 863cps), due to weaker operating results and lower investment income attributable to shareholders.