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SANTAM LIMITED - Amendment of the credit ratings of Santam Limited

Release Date: 25/06/2014 09:22
Code(s): SNT     PDF:  
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Amendment of the credit ratings of Santam Limited

SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Reg. No 1918/001680/06)
(JSE Share Code: SNT)
(NSX Share Code: SNM)
(ISIN: ZAE000093779)
(“Santam” or “the company’)

Amendment of the credit ratings of Santam Limited

Santam Limited (“Santam”) has been advised by global ratings agency Standard & Poor’s (S&P)
that, as a result of the rating agency’s lowering of the Republic of South Africa’s long-term foreign
currency sovereign credit rating from BBB to BBB- on 13 June 2014, Santam’s long-term
counterparty credit and insurer financial strength rating has been adjusted from A- to BBB+,
maintaining a rating of two notches above the sovereign rating. At the same time, S&P affirmed the
'zaAA+' South Africa national scale rating on Santam, leaving our local policyholders and note
holders unaffected.

The revised rating is a reflection of S&P’s view on South Africa and has not been driven by any
change in the financial performance of Santam.

S&P have also revised the indicative stand-alone credit profile of Santam upward by one notch to
‘A’ following the revision of their assessment of Santam's enterprise risk management (ERM) to
‘strong’ from ‘adequate with strong risk controls’. This places their assessment of Santam's risk
management capabilities in line with those of the world’s leading insurers. Santam’s long-term
counterparty credit and insurer financial strength rating differential is however constrained at two
notches by the local currency sovereign credit rating.

The financial fundamentals and strength of Santam remain robust and the business continues to
grow through its diversification strategy. Alternative arrangements to support growth in territories
outside of South Africa, in situations where this is dependent on Santam’s S&P international scale
rating, were put in place towards the end of 2013. In terms of these arrangements Santam has the
facility to use an international insurer’s AA-rated licence for such business, if required.

As set out in the Santam operational update, published on 27 May 2014, Santam experienced
improved underwriting results during the 4 month period to 30 April 2014 compared to the same
period in 2013. The solvency margin remained comfortably within the target range of 35% to 45%.

25 June 2014
Sponsor: Investec Bank Limited

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