SANTAM LIMITED - Operational update to shareholders following the board meeting held on 30 November 2016

Operational update to shareholders following the board meeting held on 30 November 2016

SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT & ISIN ZAE000093779)
NSX share code: SNM
(‘Santam’)

OPERATIONAL UPDATE TO SHAREHOLDERS FOLLOWING THE BOARD MEETING HELD
ON 30 NOVEMBER 2016

This serves as a general communication to Santam shareholders with regard to the business
environment for the ten month period ended 31 October 2016.

The Santam Group achieved positive underwriting results following the 30 June 2016 interim
reporting period, although at a lower net underwriting margin. Gross written premium growth
was under pressure, specifically in the specialist insurance lines resulting in a lower growth rate
compared to June 2016.

The group’s net underwriting margin for the 10 month period was slightly below the midpoint of
the target range of 4% to 8%. The personal, commercial and specialist intermediated business
lines were impacted by weather related catastrophe events in July and October 2016 and a
number of large commercial fire losses. MiWay maintained its growth momentum and Santam
Re made a positive contribution to the group underwriting results.

The return on insurance funds was positively impacted by the strong performance of Santam’s
fixed income portfolios.

The group’s investment performance was in line with the market for the period subsequent to 30
June 2016, whilst the zero cost fence structure over listed equities to the value of R1 billion
provided some protection against the lower equity markets. There was an increase in foreign
currency losses on US dollar denominated assets following the stronger Rand.

Regulatory approvals were obtained for the purchase of the ABSA Insurance Company Limited
intermediated commercial book of business (annual gross written premiums of R360 million)
and the book transferred to Santam effective 1 November 2016.

Santam entered into an agreement with Munich Reinsurance Company of Africa Limited
(Munich Re of Africa) on 20 October 2016 in terms of which selected Santam business units will
be able to use the reinsurer’s Standard & Poor’s AA- credit rating to write inwards international
reinsurance business on Munich Re of Africa’s license. This will enable Santam to further the
group’s strategic objective to profitably grow its business flows from territories outside South
Africa in situations where an international credit rating of A- or better is required. The agreement
between Santam and Munich Re of Africa is effective 1 January 2017.

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

The group’s economic capital coverage ratio as at 31 October 2015 is above the midpoint of the
target range of 130% to 170%. Given the current and future regulatory solvency requirements
and further potential business opportunities the Board is of the view that Santam is appropriately
capitalised.

The next set of results will be the annual results for the year ending 31 December 2016 to be
released on SENS on 2 March 2017.

CAPE TOWN
30 NOVEMBER 2016
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Sponsor: Investec Bank Limited

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