SANTAM LIMITED - Operational update to shareholders following the annual general meeting held on 1 June 2016

Operational update to shareholders following the annual general meeting held on 1 June 2016

SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT ISIN: ZAE000093779)

OPERATIONAL UPDATE TO SHAREHOLDERS FOLLOWING THE ANNUAL GENERAL
MEETING HELD ON 1 JUNE 2016

This serves as a general communication to Santam shareholders with regards to the business
environment for the four month period ended 30 April 2016.

The Group achieved acceptable underwriting results and premium growth in a tough economic
climate. Underwriting conditions remain challenging in South Africa with continued pressure on
claims costs following significant rand weakness since late 2015. The Group achieved a net
underwriting margin within the target range of 4% to 8%.

The Santam Commercial and Personal business delivered satisfactory underwriting results
despite significant hail claims in Gauteng and North West in January 2016. The Santam
Specialist business was negatively impacted by a number of large corporate property claims
and an increase in drought related crop insurance claims. MiWay and Santam Re continued to
report strong growth and acceptable loss ratios.

Growth in Gross written premium in the commercial, personal and specialist intermediated
business lines in South Africa was under pressure, reflecting the impact of competitive market
conditions and low economic growth. Satisfactory growth was achieved in specialist business
from outside South Africa.

The Group’s investment performance was in line with the market, showing a decrease
compared to the same period in 2015. Foreign exchange movements due to Rand volatility had
a significant impact on the investment results. The return on insurance funds improved from the
comparative period in 2015, positively impacted by interest rate increases.

In May 2016, a zero cost fence structure over listed equities to the value of R1 billion was
entered into based on the SWIX 40, providing 10% downside protection from the
implementation level of 10 621, with upside participation (excluding dividends) of 10.3%. The
structure matures on 15 December 2016.


The transaction to acquire 30% shareholding in Saham Finances, together with Sanlam
Emerging Markets (SEM), announced in November 2015, was finalised with an effective date of
29 February 2016.

Santam has successfully issued R1billion of subordinated debt in April 2016. A review of optimal
capital levels and the targeted solvency range is currently being performed.

Headline earnings continue to be susceptible to the inherent volatility of underwriting and
investment activities.

The next set of results will be the interim results for the six month period ending 30 June 2016 to
be published on SENS on 31 August 2016.

CAPE TOWN
1 JUNE 2016

Sponsor:
Investec Bank Limited

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