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Trading Statement
SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT ISIN: ZAE000093779)
TRADING STATEMENT – FOR 6 MONTHS ENDED 30 JUNE 2014
In terms of the Listings Requirements of JSE Limited, companies are required to publish a
Trading Statement as soon as they become reasonably certain that their financial results for
the period to be reported on will differ by more than 20% from their financial results for the
previous corresponding period.
Shareholders are advised that Santam expects its headline earnings per share (HEPS) for
the six months ended 30 June 2014 to be between 115% to 125% above those reported for
the prior period. Earnings per share (EPS) are expected to be between 120% and 130%
above the June 2013 corresponding period. The increase in HEPS and EPS has been driven
by a substantial improvement in underwriting results compared to the comparative period in
2013, together with an improvement in investment results.
As reported in our operational update to shareholders on 27 May 2014, the improvement in
underwriting results was influenced by a turnaround in the crop insurance business
compared to the significant losses recorded in 2013. Santam Specialist division also
delivered strong underwriting results. MiWay improved on its 2013 performance in
competitive market conditions whilst the Santam Re underwriting results improved following
lower retrocession costs and corrective action on the South African portfolio. The Santam
Commercial and Personal intermediated business benefited from the impact of corrective
actions and segmented premium increases implemented since the first quarter of 2013.
The Group’s net underwriting margin is now above the long term target range of 4% to 6%
influenced by the strong turnaround in crop insurance. Underwriting conditions however
remain challenging in South Africa, with continued pressure on claims costs, low GDP growth
and tough general economic conditions.
The Group’s investment performance was in line with the market, other than for the negative
impact of the hedge over equities which expired during the period. Positive fair value
movements in Santam’s interest in the Sanlam Emerging Markets (SEM) general insurance
businesses in Africa, India and South East Asia further enhanced the investment
performance. The return on insurance funds showed an improvement compared to the prior
period following the increase in interest rates in January 2014.
The group’s solvency margin as at 30 June 2014 is close to the upper end of the targeted
range of 35% to 45%.
The financial information on which this Trading Statement is based has not been reviewed or
reported on by Santam’s external auditors. Santam will release its reviewed interim results
for the six months ended 30 June 2014 on 27 August 2014.
CAPE TOWN
12 August 2014
Sponsor: Investec Bank Limited
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