To view the PDF file, sign up for a MySharenet subscription.

SANTAM LIMITED - Reviewed Interim Report for The Six Months Ended 30 June 2017

Release Date: 31/08/2017 08:00
Code(s): SNT     PDF:  
Wrap Text
Reviewed Interim Report for The Six Months Ended 30 June 2017

Santam Limited and its subsidiaries
Registration number 1918/001680/06
ISIN ZAE000093779
JSE share code: SNT
NSX share code: SNM

REVIEWED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2017

- Gross written premium growth of 14%

- Conventional insurance gross written premium growth 12%

- Return on shareholders' funds 20.4%

- Headline earnings per share decreased by 6%

- Conventional insurance underwriting margin 4.2%

- Normalised capital coverage ratio 151%

- Earnings per share increased by 8%

- Interim dividend of 336 cents per share, up 8%


FINANCIAL REVIEW

The Santam group reported excellent growth of 14%, but lower underwriting results, for the six-month period to 30 June 2017.

The group has revised the presentation of its insurance results in the following segments:
-  Conventional insurance business written on insurance licences controlled by the group;
-  Alternative Risk Transfer insurance business written on insurance licences controlled by the group; and
-  Santam's share of the insurance results of the Sanlam Emerging Markets (SEM) general insurance businesses (including Saham Finances).

The group's conventional insurance book achieved excellent gross written premium growth of 12% and a net underwriting margin of 4.2% (2016: 6.4%), which was
at the bottom end of the group's target range of 4% to 8%. The alternative risk transfer insurance segment grew by 28% following the acquisition of RMB
Structured Insurance (rebranded to Santam Structured Insurance) and achieved solid operating results. The SEM general insurance businesses delivered
improved operating results.

Investment income, inclusive of fair value movements on financial assets and liabilities, of R918 million was significantly higher than the R555 million
reported in the comparative period in 2016. The increase was mainly due to foreign currency gains on the winding up of Santam International, increased
interest income following the growth in interest-bearing assets, and the positive fair value adjustments on the listed and unlisted investment portfolios.

The lower underwriting profit compared to 2016 was the key driver of the 6% drop in headline earnings per share. An annualised return on capital of 20.4%
was achieved. The normalised economic capital coverage ratio was 151% - close to the mid-point of the target range of 130% to 170%.

CONVENTIONAL INSURANCE

The conventional insurance business reported a net underwriting margin of 4.2% compared to the 6.4% reported in 2016. The current period margin was impacted by 
significant catastrophe claims, as well as several large commercial fire claims, while excellent gross premium growth of 12% (2016: 6%) was achieved, including 
a book acquisition, which contributed growth of 1.4%. The focus on international diversification continued to reflect positively on growth with gross written
premium from outside of South Africa written on the Santam Ltd licence increasing by 21% to R1 554 million (2016: R1 288 million).

The property class reported growth of 11% on the back of solid growth in the corporate property business in addition to the acquisition of a new block of
commercial business. The motor class grew by 12%, which benefitted from 15% growth reported by MiWay (gross written premium of R1 148 million; 2016: R1 003 million), 
and strong growth in the commercial and personal lines intermediated business.

The liability class reported an increase in gross written premiums of 16% as it was positively impacted by growth in the specialist, commercial and
reinsurance businesses. Engineering also reported double-digit growth of 11%, despite continued economic pressure negatively impacting construction
projects. Growth in business from outside South Africa contributed to this result.

The accident and health class reported growth of 41%, mainly driven by growth in Santam Re as well as the travel insurance business.

On 6 June 2017, and through to 8 June 2017, a severe storm hit the Western Cape that resulted in extensive property damage in Cape Town and
environs, and a devastating fire-storm in the Southern Cape (including large parts of Knysna, Brenton-on-Sea, and parts of Plettenberg Bay) destroyed a 
large number of properties in its wake. Nearly 10 000 people were evacuated and seven people died. Over 1 000 firefighters eventually brought the fires under
control. The total insured damage has been estimated at around R3 billion, with economic losses (taking uninsured property into account) at significantly
higher levels.

This was by far the worst catastrophe event in South African insurance history, with Santam client claims totalling around R800 million,
of which R72 million related to the Cape Town property damage. The impact on the group's net underwriting results, including reinsurance reinstatement
premiums, was R234 million. The net underwriting margin, excluding the impact of this catastrophe event, was 6.4%. It was also the most severe wildfire in
South African history since the so-called 'Great Fire of 1869', which, incidentally, burnt a similar region of the Southern Cape. Experts have concluded
that the extreme wind, severe drought conditions, coupled with the extremely hot ambient conditions conspired to create this extraordinary event.

It is during such times of extreme loss and hardship that the real value of insurance comes to the fore. Santam's claims team responded almost immediately
and set up a temporary fit-for-purpose office in Knysna, which sent out mobile assessment vehicles, and was available on the ground to help clients through
the myriad of practical challenges that arise after such a devastating event.

It is Santam's view that it was the same weather system that caused the strong winds and damage in Cape Town that caused the rapid spreading and development
of the extreme bush fires along the Knysna coast. The original cause of the fires, which ignited into vast bush fires as the result of the weather system, is
still the subject of various investigations. This uncertainty creates complications in agreeing these losses with our reinsurance markets as one event or
two events, but it remains Santam's view that these losses are to be treated as one event. Despite our view, given the uncertainty around this event, we have
accounted for the losses as two events in these financial results.

In addition to the catastrophe events, the underwriting performance of the commercial and corporate property class came under pressure after an increase in
large property claims this year. During tough economic times claims often arise as maintenance and safety standards are compromised, public service
delivery falters, and fraud and arson, which are often difficult to prove, increase. While the drivers are not necessarily the same, it is notable that
Santam's Property result also suffered when South Africa went through tough economic times from 2008 to 2009. This challenge is receiving strategic
focus by expanding capacity in the areas of risk management and surveying, implementing premium rate increases, reducing exposure to certain types of risk,
and increasing the level of risk sharing and risk management in collaboration with clients.

The motor class reported strong underwriting performance in both the intermediated and direct distribution channels. MiWay reported excellent results
following an improvement in the claims ratio to 55.4% (2016: 63.1%) as it was positively impacted by disciplined underwriting. The business contributed an
underwriting profit of R179 million (2016: R72 million).

The engineering class of business achieved good underwriting results with limited claims activity during this period. The liability class was impacted by a
number of large claims, but maintained good underwriting results, although these were lower than the excellent results reported in 2016. The crop insurance
business achieved excellent results of R131 million (2016: R8 million), due to the low incidence of hail-related and drought claims during this period.

Santam Re delivered satisfactory results on third-party business, despite the impact of the catastrophe events on the South African book of business.

The group entered into a new reinsurance arrangement to provide sideways cover against multiple catastrophe events, which replaced the previous programme.
In terms of the new arrangement, effective from May 2017, all catastrophe events that exceed R10 million (previously R50 million) and capped at R100 million
are aggregated under this agreement. A deductible aggregate of R300 million (previously R100 million) applies. The total amount that can be claimed is 
R135 million (previously R100 million). There were no other significant changes to the group's reinsurance programme.

The net acquisition cost ratio of 27.5% decreased from 28.9% in 2016. The management expense ratio decreased from 16% in 2016 to 15.1% in 2017, after being
positively impacted by a continued focus on improved efficiencies, timing differences relating to marketing and IT spend as well as lower incentive cost due
to the reduced underwriting performance in 2017.

Strategic project costs, included as part of management expenses, amounted to 0.8% of net earned premium (2016: 0.6%). These costs mainly relate to the
continued development of a new core underwriting, administration and product management platform for the Santam intermediated business. The project is
progressing according to plan, with the majority of personal lines policies now being managed on the new platform. The migration process for commercial
business products is underway. Santam will maintain its focus on cost efficiencies to improve the management expense ratio over the medium term.

The net commission ratio was 12.4% (2016: 12.9%), positively impacted by the growth in MiWay, where limited commission expenses are incurred, as well as
lower commission ratios on specialist business lines.

The investment return on insurance funds increased to R296 million (2016: R268 million), supported by higher average insurance funds for the period, as
well as the good investment performance of the investment portfolios backing the insurance funds.

ALTERNATIVE RISK TRANSFER INSURANCE (ART)

Alternative risk transfer business consists of the risk finance, affinity, underwriting management and structuring businesses of Centriq Insurance and the
newly acquired Santam Structured Insurance. During March 2017, the Santam group acquired a shareholding of 100%, with an economic interest of 90%, in RMB
Structured Insurance (rebranded as Santam Structured Insurance) for R193 million in cash.

The ART business reported growth of 28% with gross written premium of R1 710 million (2016: R1 334 million). Centriq reported no gross written premium growth 
due to refunds of risk finance premiums. This was set off by the acquisition of the Santam Structured Insurance book of business. The ART business reported 
acceptable operating results before tax of R35 million (2016: R41 million).

SANLAM EMERGING MARKETS (SEM) GENERAL INSURANCE BUSINESSES (INCLUDING SAHAM FINANCES HELD THROUGH SAN JV)

The emerging markets general insurance business portfolio includes investments in the Saham Finances Group in Morocco (with subsidiaries in 26 countries in
Africa and the Middle East), Pacific & Orient Insurance Co. Bhd. (P&O) in Malaysia, Shriram General Insurance Company Ltd (SGI) in India and a further 13
general insurance businesses throughout Africa, excluding South Africa and Namibia, which are held in conjunction with SEM.

Santam's share of the gross written premium of these businesses increased by 43% to R1 257 million (2016: R880 million) following the inclusion of the Saham
Finances results for the full six-month period (2016: four months), the additional investment in SGI during the second half of 2016, and the good growth
achieved across the businesses in the portfolio, with the exception of P&O. Saham Finances achieved growth in gross written premium of 8% on a comparative
basis.

Santam's share of the net insurance result of these businesses increased to R101 million compared to R76 million in 2016. The portfolio of businesses
achieved a net insurance margin of 11.6% compared to the 12.8% reported in 2016. The performance of Saham Finances and SGI were in line with the business plans; 
however, P&O continues to experience negative growth in competitive market conditions while maintaining an acceptable underwriting margin.

The Sanlam Group entered into an agreement in June 2017 to dispose of its various interests in the Enterprise Group in Ghana. In terms of the co-investment 
arrangement with SEM, Santam, which has an economic interest of 14% in Enterprise Insurance Company (EIC), will also dispose of its interest in Enterprise 
Insurance Company Ltd for R106 million.

Effective 10 May 2017, SEM and Santam, through SAN JV, acquired a further 16.6% interest in Saham Finances via a subscription for new shares for 
US$351 million (R4.8 billion). Santam's share of the purchase price, including transaction costs, was US$11 million (R152 million). Santam's ability to participate
in the transaction was limited due to the size of the investment already held by Santam in SAN JV. The investment in SAN JV comprised 20.4% of Santam's shareholder 
funds at 30 June 2017 (December 2016: 17.5%) making it the largest strategic investment held by Santam. Santam's interest in SAN JV therefore diluted to 
15% (previously 25%). The dilution of Santam's interest in SAN JV did not affect any of its existing shareholder rights.

INVESTMENT RESULTS

Listed equities achieved a return of 3.9% for the six months to June 2017, thereby outperforming the SWIX benchmark of 3.3%. The Santam group's interest
exposure is managed in enhanced cash and active income portfolios. The interest portfolios comfortably exceeded their STeFI-related benchmarks.

Positive fair value movements (excluding the impact of currency movements) of R104 million (2016: negative movement of R71 million) in Santam's interest in 
SEM's general insurance businesses in Africa, India and Southeast Asia contributed to the improved investment performance.

Net earnings from associated companies of R54 million increased from the R45 million reported in 2016. SAN JV (Saham Finances) contributed equity-accounted
earnings of R26 million (2016: R29 million).

During June 2017, the company successfully issued additional unsecured subordinated debt to the value of R1 billion in anticipation of the redemption of the
R1 billion subordinated debt issued in 2007, which is callable in September 2017.

PROSPECTS

Trading conditions remain very competitive in a low-growth economic environment. Real annual GDP contracted by 0.7% in the first quarter following a
contraction in the economy in the fourth quarter of 2016, which resulted in a technical recession. Inflation (average CPI) of 5.1% was reported at the end
of the second quarter. The repo rate was lowered by 25 basis points in July 2017 following the 75 basis points increase in 2016. The decrease in the repo
rate will marginally impact interest income for the group.

In April 2017, Standard & Poor's (S&P) decreased Santam's international counterparty credit and insurance financial strength rating from BBB to BBB-, in line
with their local currency sovereign rating on South Africa (BBB-, negative). On a national scale basis, Santam's counterparty credit rating remained
unchanged at zaAAA following the recalibration of South Africa's National scale ratings by S&P on 3 August 2017.

The group's focus remains on growing profitably in South Africa and to increase its international diversification through the Santam Specialist Business
and Santam Re. International diversification is supported by close collaboration with the SEM general insurance businesses, which
utilises the extensive emerging markets footprint to source new business opportunities. Santam continues to focus strategically on supporting the
development of the SEM general insurance businesses by allocating appropriate technical resources. In South Africa, continued focus is placed on the
development of Santam's full multichannel capability.

Santam will maintain its focus on cost efficiencies to improve the management expense ratio over the medium term. The investment market is likely to remain
uncertain. Continued high volatility is expected on interest-bearing instruments. The increased exposure to non-rand-denominated business further increases
foreign exchange volatility for the group.

The group economic capital requirement at 30 June 2017, based on the Santam internal model, amounted to R5.9 billion. The normalised economic capital
coverage ratio, assuming a sub-debt of R2 billion, was 151%, which was close to the mid-point of the target range of 130% to 170%.

We remain committed to efficient capital management.

EVENTS AFTER THE REPORTING PERIOD

The group entered into a zero-cost collar on 31 July 2017 over R1.2 billion of listed equity investments, and locked in an investment return of 10.5% for
the year to date, with further upside participation (excluding dividends) of 2.2%. The structure matures on 21 December 2017.

There have been no other material changes in the affairs or financial position of the company and its subsidiaries since the statement of financial position
date.

DECLARATION OF ORDINARY DIVIDEND (NUMBER 127)

Notice is hereby given that the board has declared a gross interim dividend of 336 cents per share (2016: 311 cents per share).

Shareholders are advised that the last day to trade "cum dividend" will be Tuesday, 19 September 2017. The shares will trade "ex dividend" from the
commencement of business on Wednesday, 20 September 2017. The record date will be Friday, 22 September 2017, and the payment date will be Tuesday, 
26 September 2017. Certificated shareholders may not dematerialise or rematerialise their shares between Wednesday, 20 September 2017 and Friday, 
22 September 2017, both dates inclusive.

The interim dividend has been declared from income reserves and will be subject to dividends tax. The amount per share, subject to the withholding of
dividends tax at a maximum rate of 20%, is therefore 336 cents per share. A net interim dividend of 268.80 cents per share will apply to shareholders liable for
dividends tax at a rate of 20%, and 336 cents per share for shareholders that qualify for complete exemption therefrom. The issued ordinary share capital as
at 30 August 2017 is 115 131 417 shares. The company's income tax reference number is 9475/144/71/4.

In terms of the dividends tax legislation, the dividends tax amount due will be withheld and paid over to the South African Revenue Service (SARS) by a
nominee company, stockbroker or Central Security Depository Participant (CSDP) (collectively Regulated Intermediary) on behalf of shareholders. However, 
all shareholders should declare their status to their Regulated Intermediary as they may qualify for a reduced dividends tax rate or they may even be exempt
from dividends tax.

APPRECIATION

The board would like to extend its gratitude to Santam's management, employees, intermediaries and other business partners for their efforts and
contributions during the period.

PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS

The preparation of the independently reviewed interim financial statements was supervised by the chief financial officer of Santam Ltd, HD Nel CA(SA).


GG Gelink        L Lambrechts
Chairman         Chief executive officer

30 August 2017

INDEPENDENT AUDITOR'S REVIEW REPORT

TO THE SHAREHOLDERS OF SANTAM LTD

We have reviewed the condensed consolidated interim financial statements of Santam Ltd in the accompanying interim report, which comprise the condensed
consolidated statement of financial position as at 30 June 2017 and the related condensed consolidated statements of comprehensive income, changes in equity
and cash flows for the six months then ended, and selected explanatory notes.

DIRECTORS' RESPONSIBILITY FOR THE INTERIM FINANCIAL STATEMENTS

The directors are responsible for the preparation and presentation of these interim financial statements in accordance with the International Financial
Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa, and for such internal
control as the directors determine is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether
due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express a conclusion on these interim financial statements. We conducted our review in accordance with International Standard on
Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. ISRE 2410 requires us to conclude
whether anything has come to our attention that causes us to believe that the interim financial statements are not prepared in all material respects in
accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.

A review of interim financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily consisting of
making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluate the evidence obtained.

The procedures in a review are substantially less than and differ in nature from those performed in an audit conducted in accordance with International
Standards on Auditing. Accordingly, we do not express an audit opinion on these interim financial statements.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements
of Santam Ltd for the six months ended 30 June 2017 are not prepared, in all material respects, in accordance with the International Financial Reporting
Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.

PricewaterhouseCoopers Inc
Director: Zuhdi Abrahams
Registered auditor
Cape Town

30 August 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                         Reviewed at     Reviewed at     Audited at
                                                                        30 June 2017    30 June 2016    31 Dec 2016
                                                                Notes      R million       R million      R million


ASSETS
Non-current assets
  Property and equipment                                                         125              96            106
  Intangible assets                                                              860             837            885
  Deferred income tax                                                             63             124            105
  Investment in associates and joint ventures                                  1 782           1 702          1 536
  Financial assets at fair value through income
    Equity securities                                               6          4 633           2 788          2 581
    Debt securities                                                 6         12 796          10 911         10 849
  Reinsurance assets                                                7            279             164            140
  Deposit with cell owner                                                        141             231            163
  Total non-current assets                                                    20 679          16 853         16 365

Current assets
  Cell owners' and policyholders' interest                                         8               4              7
  Financial assets at fair value through income
    Equity securities                                               6            106               -              -
    Derivatives                                                     6              6               6              1
    Short-term money market instruments                             6          2 665           1 981          1 361
  Reinsurance assets                                                7          5 678           3 953          4 349
  Deposit with cell owner                                                         48              61             56
  Deferred acquisition costs                                                     425             410            469
  Loans and receivables including insurance receivables             6          3 997           3 322          3 754
  Income tax assets                                                               33              17             19
  Cash and cash equivalents                                                    4 118           2 241          2 887
  Non-current assets held for sale                                  8              -             125              8
  Total current assets                                                        17 084          12 120         12 911

Total assets                                                                  37 763          28 973         29 276

EQUITY AND LIABILITIES
Capital and reserves attributable to the company's equity holders
  Share capital                                                                  103             103            103
  Treasury shares                                                               (463)           (460)          (472)
  Other reserves                                                                (113)            240            (41)
  Distributable reserves                                                       7 374           7 958          7 286
                                                                               6 901           7 841          6 876
Non-controlling interest                                                         475             461            469
Total equity                                                                   7 376           8 302          7 345

Non-current liabilities
  Deferred income tax                                                            229             217            101
  Financial liabilities at fair value through income
    Debt securities                                                  6         2 021           2 005          2 005
    Derivatives                                                      6             -               1              -
  Cell owners' and policyholders' interest                                     1 206           1 060          1 153
  Insurance liabilities                                              7         1 701           1 423          1 312
  Reinsurance liability relating to cell owners                                  141             231            163
  Total non-current liabilities                                                5 298           4 937          4 734

Current liabilities
  Financial liabilities at fair value through income
    Debt securities                                                  6         1 047              48             48
    Investment contracts                                             6         1 639              84            101
    Derivatives                                                      6             -               9              -
  Financial liabilities at amortised cost
    Collateral guarantee contracts                                   6           134             104            123
  Cell owners' and policyholders' interest                                     1 779               -              -
  Insurance liabilities                                              7        15 917          11 577         12 284
  Reinsurance liability relating to cell owners                                   48              61             56
  Deferred reinsurance acquisition revenue                                       214             183            273
  Provisions for other liabilities and charges                                    98              83             71
  Trade and other payables including insurance payables              6         4 132           3 407          4 093
  Current income tax liabilities                                                  81             178            148
  Total current liabilities                                                   25 089          15 734         17 197

Total liabilities                                                             30 387          20 671         21 931

Total shareholders' equity and liabilities                                    37 763          28 973         29 276

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                                                   Reviewed          Reviewed               Audited
                                                                                           Six months ended  Six months ended            Year ended
                                                                                               30 June 2017      30 June 2016           31 Dec 2016
                                                                                     Notes        R million         R million   Change    R million


Gross written premium                                                                                13 795            12 148      14%       25 909
Less: reinsurance written premium                                                                     3 709             2 914                 6 137
Net written premium                                                                                  10 086             9 234       9%       19 772
Less: change in unearned premium
  Gross amount                                                                                         (257)             (532)                  137
  Reinsurers' share                                                                                    (208)               66                  (191)
Net insurance premium revenue                                                                        10 551             9 700       9%       19 826
Investment income                                                                        9              590               441      34%          777
Income from reinsurance contracts ceded                                                                 698               629                 1 337
Net gains/(losses) on financial assets and liabilities at fair value through income      9              153               101                    42
Investment income and fair value losses on financial assets held for sale                9              175                13                    13
Other income                                                                                             64                 -                     -
Net income                                                                                           12 231            10 884      12%       21 995

Insurance claims and loss adjustment expenses                                                        10 700             8 488                17 100
Insurance claims and loss adjustment expenses recovered from reinsurers                              (3 448)           (2 199)               (4 189)
Net insurance benefits and claims                                                                     7 252             6 289      15%       12 911

Expenses for the acquisition of insurance contracts                                                   1 952             1 846                 3 716
Expenses for marketing and administration                                                             1 674             1 571                 3 247
Expenses for investment-related activities                                                               24                26                    70
Amortisation and impairment of intangible assets                                                         37                22                    51
Investment return allocated to cell owners and structured insurance products                            120                 -                     -
Total expenses                                                                                       11 059             9 754      13%       19 995

Results of operating activities                                                                       1 172             1 130       4%        2 000
Finance costs                                                                                          (127)              (77)                 (212)
Net income from associates and joint ventures                                                            54                45                    67
Profit on sale of associates                                                            11                5                 -                     -
Gain on dilution of associate                                                           11               18                 -                     -
Reclassification of foreign currency translation reserve on dilution of associate       11              (90)                -                     -
Profit before tax                                                                                     1 032             1 098      (6%)       1 855
Income tax expense                                                                      10             (224)             (336)                 (524)
Profit for the period                                                                                   808               762       6%        1 331

Other comprehensive income, net of tax
Items that may subsequently be reclassified to income:
  Currency translation differences                                                                     (161)             (114)                 (197)
  Share of associates' currency translation differences                                                  83               (62)                 (255)
  Hedging reserve movement                                                                                5              (134)                 (140)
Total comprehensive income for the period                                                               735               452      63%          739

Profit attributable to:
- equity holders of the company                                                                         753               697       8%        1 212
- non-controlling interest                                                                               55                65                   119
                                                                                                        808               762                 1 331

Total comprehensive income attributable to:
- equity holders of the company                                                                         680               387      76%          620
- non-controlling interest                                                                               55                65                   119
                                                                                                        735               452                   739

Earnings attributable to equity shareholders

Earnings per share (cents)                                                              12
  Basic earnings per share                                                                              683               633       8%        1 100
  Diluted earnings per share                                                                            677               627       8%        1 088

  Weighted average number of ordinary shares (millions)                                              110.26            110.19                110.21
  Weighted average number of ordinary shares for diluted earnings per share (millions)               111.28            111.23                111.37

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                      Attributable to equity holders of the company                      Non-
                                                                     Share     Treasury       Other  Distributable                controlling
                                                                   capital       shares    reserves       reserves        Total      interest       Total
                                                                 R million    R million   R million      R million    R million     R million   R million


Balance as at 1 January 2016                                           103         (450)        548          7 880        8 081           466       8 547
Profit for the year                                                      -            -           -          1 212        1 212           119       1 331
Other comprehensive income:
  Currency translation differences                                       -            -        (197)             -         (197)            -        (197)
  Share of associates' currency translation differences                  -            -        (255)             -         (255)            -        (255)
  Hedging reserve movement                                               -            -        (140)             -         (140)            -        (140)
Total comprehensive income for the year ended 31 December 2016          -            -        (592)         1 212          620           119         739
Issue of treasury shares in terms of share option schemes                -           76           -            (76)           -             -           -
Purchase of treasury shares                                              -          (98)          -              -          (98)            -         (98)
Transfer to reserves                                                     -            -           3             (3)           -             -           -
Share-based payment costs                                                -            -           -             79           79             -          79
Dividends paid                                                           -            -           -         (1 806)      (1 806)         (116)     (1 922)
Balance as at 31 December 2016                                         103         (472)        (41)         7 286        6 876           469       7 345
Profit for the period                                                    -            -           -            753          753            55         808
Other comprehensive income:
  Currency translation differences                                       -            -        (161)             -         (161)            -        (161)
  Share of associates' currency translation differences                  -            -          83              -           83             -          83
  Hedging reserve movement                                               -            -           5              -            5             -           5
Total comprehensive income for the period ended 30 June 2017             -            -         (73)           753          680            55         735
Issue of treasury shares in terms of share option schemes                -           74           -            (74)           -             -           -
Purchase of treasury shares                                              -          (65)          -              -          (65)            -         (65)
Transfer to reserves                                                     -            -           1             (1)           -             -           -
Share-based payment costs                                                -            -           -             41           41             -          41
Dividends paid                                                           -            -           -           (631)        (631)          (49)       (680)
Balance as at 30 June 2017                                             103         (463)       (113)         7 374        6 901           475       7 376

Balance as at 1 January 2016                                           103         (450)        548          7 880        8 081           466       8 547
Profit for the period                                                    -            -           -            697          697            65         762
Other comprehensive income:
  Currency translation differences                                       -            -        (114)             -         (114)            -        (114)
  Share of associate's currency translation differences                  -            -         (62)             -          (62)            -         (62)
  Hedging reserve movement                                               -            -        (134)             -         (134)            -        (134)
Total comprehensive income for the period ended 30 June 2016             -            -        (310)           697          387            65         452
Sale of treasury shares                                                  -           75           -            (75)           -             -           -
Purchase of treasury shares                                              -          (85)          -              -          (85)            -         (85)
Transfer to reserves                                                     -            -           2             (2)           -             -           -
Share-based payment costs                                                -            -           -             39           39             -          39
Dividends paid                                                           -            -           -           (581)        (581)          (70)       (651)
Balance as at 30 June 2016                                             103         (460)        240          7 958        7 841           461       8 302

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                                      Reviewed          Reviewed           Audited
                                                                                              Six months ended  Six months ended        Year ended
                                                                                                  30 June 2017      30 June 2016       31 Dec 2016
                                                                                       Notes         R million         R million         R million


Cash flows from operating activities
Cash generated from operations                                                                           1 637               844             2 171
Interest paid                                                                                              (94)              (50)             (161)
Income tax paid                                                                                           (210)             (340)             (681)
Net cash from operating activities                                                                       1 333               454             1 329

Cash flows from investing activities
Acquisition of financial assets                                                                         (7 774)           (9 505)          (17 594)
Proceeds from sale of financial assets                                                                   6 799             8 538            17 764
Settlement of fence                                                                                          -                 -                75
Acquisition of business, net of cash acquired                                             11               852                 -                70
Cash received through sale of subsidiaries                                                11                 -               208               208
Purchases of equipment                                                                                     (20)              (26)              (60)
Purchases of intangible assets                                                                             (12)              (21)              (50)
Proceeds from sale of equipment                                                                              1                 1                 2
Acquisition of associates and joint ventures                                              11              (152)           (1 467)           (1 467)
Capitalisation of associates                                                              11               (14)                -               (10)
Proceeds from sale of associates                                                          11                23                 -                 -
Settlement of deferred conditional right relating to non-current assets held for sale                        -                 -               509
Cash proceeds from unwinding of non-current assets held for sale                           8                 -               394                 -
Net cash used in investing activities                                                                     (297)           (1 878)             (553)

Cash flows from financing activities
Purchase of treasury shares                                                                                (65)              (85)              (98)
Proceeds from issue of unsecured subordinated callable notes                                             1 000             1 000             1 000
Increase in investment contract liabilities                                                                  5                 7                31
Increase in collateral guarantee contracts                                                                   6                 -                12
Dividends paid to company's shareholders                                                                  (631)             (581)           (1 806)
Dividends paid to non-controlling interest                                                                 (49)              (70)             (116)
(Decrease)/increase in cell owners' and policyholders' interest                                            (38)              120              (114)
Net cash from/(used in) financing activities                                                               228               391            (1 091)

Net increase/(decrease) in cash and cash equivalents                                                     1 264            (1 033)             (315)
Cash and cash equivalents at the beginning of the period                                                 2 887             3 349             3 349
Exchange losses on cash and cash equivalents                                                               (33)              (75)             (147)
Cash and cash equivalents at the end of the period                                                       4 118             2 241             2 887

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. Basis of preparation

The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards, IAS 34 - Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the
Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.

2. Accounting policies

The accounting policies applied in the preparation of the condensed consolidated interim financial statements are in terms of IFRS and are consistent with
those accounting policies applied in the preparation of the previous consolidated annual financial statements, except for:

The following new IFRSs and/or IFRICs were effective for the first time from 1 January 2017:
Amendment to IAS 7 - Statement of Cash Flows
Amendment to IAS 12 - Income Taxes

There was no material impact on the condensed consolidated interim financial statements identified.

Of the standards that are not yet effective, management expects IFRS 9 and IFRS 17 to have an impact on the group. IFRS 9 addresses classification and
measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two
classification categories: amortised cost and fair value. Based on management's current assessment, the impact is not expected to be material.

IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard.
IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2021. Management is currently busy with a detailed
assessment of the impact of this standard.

3. Estimates

The preparation of condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the group's accounting
policies and the key sources of estimation uncertainty are the same as those that applied to the consolidated annual financial statements for the year ended
31 December 2016.

4. Risk management

The group's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk, foreign currency risk and
derivatives risk), credit risk and liquidity risk. Insurance activities expose the group to insurance risk (including pricing risk, reserving risk,
accumulation risk and reinsurance risk). The group is also exposed to operational risk and legal risk.

The capital risk management philosophy is to maximise the return on shareholders' capital within an appropriate risk framework.

The condensed consolidated interim financial statements do not include all risk management information and disclosure required in the annual financial
statements and should be read in conjunction with the group's annual financial statements as at 31 December 2016.

There have been no material changes in the risk management policies since 31 December 2016.

5. Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.  The chief operating
decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief executive
officer, supported by the group executive committee.

The group conducts mainly insurance and investment activities.

Insurance activities:
The group has revised the presentation of its insurance results in the following segments:
- Conventional insurance business written on insurance licences controlled by the group.
- Alternative risk transfer insurance business written on insurance licences controlled by the group.
- Santam's share of the insurance results of the Sanlam Emerging Markets general insurance businesses, including SAN JV (Saham Finances).

It is further analysed by insurance class. Operating segments are aggregated based on quantitative and/or qualitative significance. The performance of
insurance activities is based on gross written premium as a measure of growth, with net underwriting result as measure of profitability.

As noted above, the presentation of insurance activities has been enhanced subsequent to the acquisition of SSI (refer to note 11). The comparative
information has been restated to provide the information in the same enhanced format.

Investment activities:
Investment activities are all investment-related activities undertaken by the group. Due to the nature of the activities conducted, investment activities
are considered to be one operating segment. Investment activities are measured based on net investment income.

Growth is measured for strategic investments based on the gross written premium generated by the underlying businesses. The underwriting and investment
return on insurance funds are provided for each of the underlying components included in the insurance segment for consideration by the chief operating
decision-maker. With regard to the SEM and SAN JV (Saham Finances) insurance business, this information is considered to be a reallocation of fair value
movements recognised on the SEM target shares as well as equity-accounted earnings on the investments in associates and joint ventures. It is also included
as reconciling items in order to reconcile to the consolidated statement of comprehensive income. Overall profitability is measured based on net investment
income and fair value movements from SEM target share investments and net income from associates and joint ventures.

Given the nature of the operations, there is no single external client that provides 10% or more of the group's revenues.

The investment return on insurance funds is calculated based on the day-weighted effective return realised by the group on the assets held to cover the
group's net insurance working capital requirements.

Insurance business denominated in foreign currencies is covered by foreign denominated bank accounts and investment portfolios. Foreign exchange movements
on underwriting activities are therefore offset against the foreign exchange movements recognised on the bank accounts and investment portfolios.

The Santam BEE transaction costs are unrelated to the core underwriting and investment performance of the group. Therefore, these costs are disclosed as
unallocated activities.

Santam Ltd is domiciled in South Africa. Geographical analysis of the gross written premium and non-current assets and liabilities is based on the
countries in which the business is underwritten or managed. Non-current assets comprise goodwill and intangible assets, property and equipment, investments
in associates and joint ventures and SEM target shares (included in financial assets).

5.1  For the six months ended 30 June 2017    
                                                                     
                                                                                       Insurance
                                                                                                  Santam’s
                                                                                  Alternative     share of
                                                                  Conventional           risk          SEM       Total
Business activity                                                    R million      R million    R million   R million
          
          
Revenue                                                                 12 085          1 710        1 257      15 052 
Net earned premium                                                      10 250            301          870      11 421 
Net claims incurred                                                      7 003            249          640       7 892 
Net commission                                                           1 273            (18)          59       1 314 
Management expenses (excluding BEE costs)(2)                             1 546             76          245       1 867
Underwriting result                                                        428             (6)         (74)        348
Investment return on insurance funds                                       296             42          175         513
Net insurance result                                                       724             36          101         861
Other income(3)                                                             41             22            –          63
Other expenses(3)                                                          (42)           (23)           –         (65)
Operating result                                                           723             35          101         859
Reallocation of operating result(1)                                          –              –         (101)       (101)
Investment income/(losses) net of investment-related fees                    –            120           88         208
Investment return allocated to cell owners and structured 
insurance products                                                           –           (120)           –        (120)
Finance costs                                                                –              –            –           – 
Income from associates and joint ventures                                    –              –           26          26
Gain on dilution of associate                                                –              –           18          18
Reclassification of foreign currency translation reserve on dilution 
of associate                                                                 –              –          (90)        (90)
Santam BEE costs                                                             –              –            –           – 
Amortisation and impairment of intangible assets(2)                        (18)             –            –         (18)
Income before taxation                                                     705             35           42         782
              
                                                      
                                                                                                          Reconciling              IFRS
                                                                       Investment             Total   and unallocated             Total
Business activity                                                       R million         R million         R million         R million
              
              
Revenue                                                                       404            15 456            (1 661)           13 795 
Net earned premium                                                              –            11 421              (870)           10 551 
Net claims incurred                                                             –             7 892              (640)            7 252 
Net commission                                                                  –             1 314               (59)            1 255 
Management expenses (excluding BEE costs)(2)                                    –             1 867              (245)            1 622
Underwriting result                                                             –               348                74               422
Investment return on insurance funds                                            –               513              (175)              338
Net insurance result                                                            –               861              (101)              760
Other income                                                                    –                63                 –                63
Other expenses                                                                  –               (65)                –               (65)
Operating result                                                                –               859              (101)              758
Reallocation of operating result(1)                                             –              (101)              101                 –
Investment income/(losses) net of investment-related fees                     347               555                 –               555
Investment return allocated to cell owners and structured 
insurance products                                                              –              (120)                –              (120)
Finance costs                                                                (127)             (127)                –              (127)
Income from associates and joint ventures                                      33                59                 –                59
Gain on dilution of associate                                                   –                18                 –                18
Reclassification of foreign currency translation reserve 
on dilution of associate                                                        –               (90)                –               (90)
Santam BEE costs                                                                –                 –                (3)               (3)
Amortisation and impairment of intangible assets(2)                             –               (18)                –               (18)
Income before taxation                                                        253             1 035                (3)            1 032
              
(1)  Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for management 
     reporting purposes.
(2)  Amortisation of computer software included as part of management expenses.
(3)  Includes other income and expenses not related to underwriting activities.


5.1 For the six months ended 30 June 2017 (continued)

                                                                                                             Gross written  Underwriting
                                                                                                                   premium        result
                                                                                                                 R million     R million


Insurance activities
The group's conventional insurance activities are spread over various classes of general insurance.

Accident and health                                                                                                    232            35
Crop                                                                                                                    72           131
Engineering                                                                                                            645           114
Guarantee                                                                                                               77            (3)
Liability                                                                                                              566            93
Miscellaneous                                                                                                            5             2
Motor                                                                                                                5 944           459
Property                                                                                                             4 188          (415)
Transportation                                                                                                         356            12
Total                                                                                                               12 085           428

Comprising:
Commercial insurance                                                                                                 6 542           247
Personal insurance                                                                                                   5 543           181
Total                                                                                                               12 085           428

                                                                                           R million


Investment activities
The group's return on investment-related activities can be analysed as follows:

Investment income                                                                                308
Net gains on financial assets and liabilities at fair value through income                        63
Income from associates and joint ventures                                                         33
Investment-related revenue                                                                       404
Expenses for investment-related activities                                                       (24)
Finance costs                                                                                   (127)
Net total investment-related transactions                                                        253

For detailed analysis of investment activities, refer to notes 6 and 9.

Santam's share of SEM
The group's return on Santam's share of SEM activities can be analysed as follows:

                                                                                                           SAN JV        
                                                                                                           (Saham
                                                                                              SEM        Finances)     Total
                                                                                        R million       R million       R million


Revenue                                                                                       672             585           1 257

Net earned premium                                                                            434             436             870
Net claims incurred                                                                           359             281             640
Net commission                                                                                 14              45              59
Management expenses (excluding BEE costs)                                                     118             127             245
Underwriting result                                                                           (57)            (17)            (74)
Investment return on insurance funds                                                           96              79             175
Net insurance result/operating result                                                          39              62             101
Reallocation of operating result(1)                                                           (39)            (62)           (101)
Investment income net of investment-related fees                                               88               -              88
Income from associates and joint ventures                                                       -              26              26
Gain on dilution of associate                                                                   -              18              18
Reclassification of foreign currency translation reserve on dilution of associate               -             (90)            (90)
Income/(loss) before taxation                                                                  88             (46)             42

(1) Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for
    management reporting purposes.


5.2 For the six months ended 30 June 2016 (restated)

                                                                                                     Insurance
                                                                                                           Santam's      
                                                                                             Alternative   share of
                                                                               Conventional         risk        SEM       Total      
Business activity                                                                 R million    R million  R million   R million


Revenue                                                                              10 814        1 334        880     13 028
Net earned premium                                                                    9 340          360        596     10 296
Net claims incurred                                                                   6 032          257        411      6 700
Net commission                                                                        1 209            8         57      1 274
Management expenses (excluding BEE costs)(2)                                          1 499           77        159      1 735
Underwriting result                                                                     600           18        (31)       587
Investment return on insurance funds                                                    268           23        107        398
Net insurance result                                                                    868           41         76        985
Other income(3)                                                                          41           19          -         60
Other expenses(3)                                                                       (41)         (19)         -        (60)
Operating result                                                                        868           41         76        985
Reallocation of operating result(1)                                                       -            -        (76)       (76)
Investment income/(losses) net of investment-related fees                                 -           99       (110)       (11)
Investment return allocated to cell owners and structured insurance products              -          (99)         -        (99)
Finance costs                                                                             -            -          -          -
Income from associates and joint ventures                                                 -            -         29         29
Santam BEE costs                                                                          -            -          -          -
Amortisation and impairment of intangible assets(2)                                     (11)           -          -        (11)
Income before taxation                                                                  857           41        (81)       817

                                                                                                                  Reconciling           
                                                                               Investment             Total   and unallocated             Total
Business activity                                                               R million         R million         R million         R million


Revenue                                                                               390            13 418            (1 270)           12 148
Net earned premium                                                                      -            10 296              (596)            9 700
Net claims incurred                                                                     -             6 700              (411)            6 289
Net commission                                                                          -             1 274               (57)            1 217
Management expenses (excluding BEE costs)(2)                                            -             1 735              (159)            1 576
Underwriting result                                                                     -               587                31               618
Investment return on insurance funds                                                    -               398              (107)              291
Net insurance result                                                                    -               985               (76)              909
Other income                                                                            -                60                 -                60
Other expenses                                                                          -               (60)                -               (60)
Operating result                                                                        -               985               (76)              909
Reallocation of operating result(1)                                                     -               (76)               76                 -
Investment income/(losses) net of investment-related fees                             348               337                 -               337
Investment return allocated to cell owners and structured insurance products           -                (99)                -               (99)
Finance costs                                                                         (77)              (77)                -               (77)
Income from associates and joint ventures                                              16                45                 -                45
Santam BEE costs                                                                        -                 -                (6)               (6)
Amortisation and impairment of intangible assets(2)                                     -               (11)                -               (11)
Income before taxation                                                                287             1 104                (6)            1 098

(1) Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for
    management reporting purposes.
(2) Amortisation of computer software included as part of management expenses.
(3) Includes other income and expenses not related to underwriting activities.


5.2 For the six months ended 30 June 2016 (restated) (continued)

                                                                                                             Gross written  Underwriting
                                                                                                                   premium        result
                                                                                                                 R million     R million


Insurance activities
The group's conventional insurance activities are spread over various classes of general insurance.

Accident and health                                                                                                    164             2
Crop                                                                                                                   108             8
Engineering                                                                                                            579            81
Guarantee                                                                                                               32            (5)
Liability                                                                                                              489           172
Miscellaneous                                                                                                           22             3
Motor                                                                                                                5 315           300
Property                                                                                                             3 772            18
Transportation                                                                                                         333            21
Total                                                                                                               10 814           600

Comprising:
Commercial insurance                                                                                                 5 853           344
Personal insurance                                                                                                   4 961           256
Total                                                                                                               10 814           600


                                                                                           R million

Investment activities
The group's return on investment-related activities can be analysed as follows:

Investment income                                                                                150
Net gains on financial assets and liabilities at fair value through income                       224
Income from associates and joint ventures                                                         16
Investment-related revenue                                                                       390
Expenses for investment-related activities                                                       (26)
Finance costs                                                                                    (77)
Net total investment-related transactions                                                        287

For detailed analysis of investment activities, refer to notes 6 and 9.

Santam's share of SEM
The group's return on Santam's share of SEM activities can be analysed as follows:

                                                                                                           SAN JV      
                                                                                                           (Saham
                                                                                              SEM        Finances)      Total
                                                                                        R million       R million       R million


Revenue                                                                                       489             391             880

Net earned premium                                                                            296             300             596
Net claims incurred                                                                           212             199             411
Net commission                                                                                 22              35              57
Management expenses (excluding BEE costs)                                                      83              76             159
Underwriting result                                                                           (21)            (10)            (31)
Investment return on insurance funds                                                           42              65             107
Net insurance result/operating result                                                          21              55              76
Reallocation of operating result(1)                                                           (21)            (55)            (76)
Investment loss net of investment-related fees                                               (110)              -            (110)
Income from associates and joint ventures                                                       -              29              29
(Loss)/income before taxation                                                                (110)             29             (81)

(1) Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for
    management reporting purposes.


5.3 For the year ended 31 December 2016 (restated)

                                                                                                     Insurance
                                                                                                                   Santam's      
                                                                                                  Alternative      share of
                                                                                    Conventional         risk           SEM      Total
Business activity                                                                      R million    R million     R million  R million


Revenue                                                                                   23 503        2 406         1 939     27 848
Net earned premium                                                                        19 245          581         1 414     21 240
Net claims incurred                                                                       12 482          429           982     13 893
Net commission                                                                             2 374            5           121      2 500
Management expenses (excluding BEE costs)(2)                                               3 137          131           369      3 637
Underwriting result                                                                        1 252           16           (58)     1 210
Investment return on insurance funds                                                         558           61           220        839
Net insurance result                                                                       1 810           77           162      2 049
Other income(3)                                                                               89           38             -        127
Other expenses(3)                                                                            (89)         (37)            -       (126)
Operating result                                                                           1 810           78           162      2 050
Reallocation of net operating result(1)                                                        -            -          (162)      (162)
Investment income/(losses) net of investment-related fees                                      -          202          (213)       (11)
Investment return allocated to cell owners and structured insurance products                   -         (202)            -       (202)
Finance costs                                                                                  -            -             -          -
Income from associates including profit on sale                                                -            -            43         43
Santam BEE costs                                                                               -            -             -          -
Amortisation and impairment of intangible assets(2)                                          (21)           -             -        (21)
Income before taxation                                                                     1 789           78          (170)     1 697



                                                                                                                    Reconciling               IFRS
                                                                               Investment              Total    and unallocated              Total
Business activity                                                               R million          R million          R million          R million


Revenue                                                                               449             28 297             (2 388)            25 909
Net earned premium                                                                      -             21 240             (1 414)            19 826
Net claims incurred                                                                     -             13 893               (982)            12 911
Net commission                                                                          -              2 500               (121)             2 379
Management expenses (excluding BEE costs)(2)                                            -              3 637               (369)             3 268
Underwriting result                                                                     -              1 210                 58              1 268
Investment return on insurance funds                                                    -                839               (220)               619
Net insurance result                                                                    -              2 049               (162)             1 887
Other income                                                                            -                127                  -                127
Other expenses                                                                          -               (126)                 -               (126)
Operating result                                                                        -              2 050               (162)             1 888
Reallocation of operating result(1)                                                     -               (162)               162                  -
Investment income/(losses) net of investment-related fees                             355                344                  -                344
Investment return allocated to cell owners and structured insurance products            -               (202)                 -               (202)
Finance costs                                                                        (212)              (212)                 -               (212)
Income from associates including profit on sale                                        24                 67                  -                 67
Santam BEE costs                                                                        -                  -                 (9)                (9)
Amortisation and impairment of intangible assets(2)                                     -                (21)                 -                (21)
Income before taxation                                                                167              1 864                 (9)             1 855

(1) Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for
    management reporting purposes.
(2) Amortisation of computer software included as part of management expenses. Santam's share of the costs to manage the SEM portfolio of R22 million 
    has been included in management expenses.
(3) Includes other income and expenses not related to underwriting activities.

5.3 For the year ended 31 December 2016 (restated) (continued)

                                                                                                             Gross written  Underwriting
                                                                                                                   premium        result
                                                                                                                 R million     R million


Insurance activities
The group's conventional insurance activities are spread over various classes of general insurance.

Accident and health                                                                                                    374            49
Crop                                                                                                                   984            69
Engineering                                                                                                          1 196           196
Guarantee                                                                                                               86           (31)
Liability                                                                                                            1 202           301
Miscellaneous                                                                                                            9            (3)
Motor                                                                                                               11 004           622
Property                                                                                                             7 972            22
Transportation                                                                                                         676            27
Total                                                                                                               23 503         1 252

Comprising:
Commercial insurance                                                                                                13 330           735
Personal insurance                                                                                                  10 173           517
Total                                                                                                               23 503         1 252

                                                                                      R million


Investment activities
The group's return on investment-related activities can be analysed as follows:

Investment income                                                                           158
Net gains on financial assets and liabilities at fair value through income                  267
Income from associates including profit on sale                                              24
Investment-related revenue                                                                  449
Expenses for investment-related activities                                                  (70)
Finance costs                                                                              (212)
Net total investment-related transactions                                                   167

For detailed analysis of investment activities, refer to notes 6 and 9.

Santam's share of SEM
The group's return on Santam's share of SEM activities can be analysed as follows:

                                                                           SAN JV      
                                                                           (Saham
                                                              SEM        Finances)          Total
                                                        R million       R million       R million


Revenue                                                       962             977           1 939

Net earned premium                                            665             749           1 414
Net claims incurred                                           484             498             982
Net commission                                                 32              89             121
Management expenses (excluding BEE costs)                     184             185             369
Underwriting result                                           (35)            (23)            (58)
Investment return on insurance funds                          119             101             220
Net insurance result/operating result                          84              78             162
Reallocation of operating result(1)                           (84)            (78)           (162)
Investment loss net of investment-related fees               (213)              -            (213)
Income from associates including profit on sale                 -              43              43
(Loss)/income before taxation                                (213)             43            (170)

(1) Reconciling items consist of the reallocation of net insurance results relating to the underlying investments SEM and SAN JV (Saham Finances) for
    management reporting purposes.

5.4 Geographical analysis (restated)

                                                                 Gross written premium
                                                     30 June 2017    30 June 2016     31 Dec 2016
                                                        R million       R million       R million


South Africa                                               12 241          10 860          23 126
Rest of Africa(1)                                           1 960           1 619           3 479
Southeast Asia, India, Middle East and China(2)               737             524           1 009
Other(3)                                                      115              24             234
                                                           15 053          13 027          27 848
Reconciling items(4)                                       (1 258)           (879)         (1 939)
Group total                                                13 795          12 148          25 909

                                                                    Non-current assets
                                                     30 June 2017    30 June 2016     31 Dec 2016
                                                        R million       R million       R million


South Africa                                                1 136           1 071           1 126
Rest of Africa                                              1 915           1 822           1 670
Southeast Asia, India, Middle East and China                  882             684             857
Group total                                                 3 933           3 577           3 653

(1) Includes gross written premium relating to Namibia of R560 million (June 2016: R565 million; Dec 2016: R1 118 million).
(2) Includes gross written premium relating to China of R48 million (June 2016: R53 million; Dec 2016: R116 million).
(3) Includes gross written premium predominantly relating to Europe.
(4) Reconciling items relate to the underlying investments included in the SEM and SAN JV (Saham Finances) insurance businesses for management
    reporting purposes.


                                                                                                          Reviewed at   Reviewed at   Audited at
                                                                                                         30 June 2017  30 June 2016  31 Dec 2016
                                                                                                            R million     R million    R million


6.  Financial assets and liabilities
The group's financial assets and liabilities are summarised below by measurement category.

Financial assets
Financial assets at fair value through income                                                                  20 206        15 686      14 792
Loans and receivables                                                                                           3 997         3 322       3 754
                                                                                                               24 203        19 008      18 546

Financial liabilities
Financial liabilities at fair value through income                                                              4 707         2 147       2 154
Financial liabilities at amortised cost                                                                           134           104         123
Trade and other payables                                                                                        4 132         3 407       4 093
                                                                                                                8 973         5 658       6 370

Financial instruments measured at fair value on a recurring basis
The table below analyses financial instruments, carried at fair value through income, by valuation method. There were no significant changes in the
valuation methods applied since 31 December 2016. The different levels have been defined as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: Input other than quoted prices included within level 1 that is observable for the asset or liability, either directly (that is, prices), or
  indirectly (that is, derived from prices). Listed bonds that did not trade actively during a financial period are classified as level 2 financial
  instruments. The fair value of level 2 instruments is predominantly determined using discounted cash flow models based on market observable input.
- Level 3: Input for the asset or liability that is not based on observable data (that is, unobservable input).

All government and corporate bonds were transferred from level 1 to level 2 during the second half of 2016 based on management's assessment of an active
market for debt instruments. There were no significant transfers between level 1 and level 2 during the current period.

All derivative instruments are classified as investments held for trading. The rest of the investment portfolio is designated as financial assets at fair
value through income based on the principle that the entire portfolio is managed on a fair value basis and reported as such to the investment committee.

30 June 2017                                                Level 1    Level 2    Level 3      Total
Financial assets at fair value through income             R million  R million  R million  R million


Equity securities
  Quoted
    Listed                                                    2 830          -          -      2 830
    Unitised funds                                                -        632          -        632
    Irredeemable preference shares                                6          -          -          6
  Unquoted                                                        -          -      1 271      1 271
Total equity securities                                       2 836        632      1 271      4 739
Debt securities
  Quoted
    Government and other bonds                                    -      3 453          -      3 453
    Collateralised securities                                     -        449          -        449
    Unit-linked investments                                       -        593          -        593
    Money market instruments more than one year                   -      2 696          -      2 696
    Equity-linked notes                                           -        246          -        246
  Unquoted
    Government and other bonds                                    -        251          -        251
    Collateralised securities                                     -        526          -        526
    Money market instruments more than one year                   -      4 372          -      4 372
    Redeemable preference shares                                  -        185         25        210
Total debt securities                                             -     12 771         25     12 796
Derivative instruments
  Exchange traded futures                                         -          6          -          6
  Interest rate swaps(1)                                          -          -          -          -
Total derivative instruments                                      -          6          -          6
Short-term money market instruments                               -      2 665          -      2 665
Total financial assets at fair value through income           2 836     16 074      1 296     20 206

(1) Carrying value as at 30 June 2017 is less than R1 million.

Financial liabilities at fair value through income

Debt securities                                                  -       3 068          -      3 068
Investment contracts                                             -       1 639          -      1 639
Total financial liabilities at fair value through income         -       4 707          -      4 707


30 June 2016                                                Level 1    Level 2    Level 3      Total
Financial assets at fair value through income             R million  R million  R million  R million


Equity securities
  Quoted
    Listed                                                    1 719          -          -      1 719
    Unitised funds                                                -        113          -        113
    Irredeemable preference shares                                1          -          -          1
  Unquoted                                                        -          -        955        955
Total equity securities                                       1 720        113        955      2 788
Debt securities
  Quoted
    Government and other bonds                                1 821      1 039         27      2 887
    Collateralised securities                                     -        140          -        140
    Redeemable preference shares                                  -        220          -        220
    Money market instruments more than one year                   -      2 450         30      2 480
    Equity-linked notes                                           -        264          -        264
  Unquoted 
    Government and other bonds                                    -        135          -        135
    Collateralised securities                                     -         10          -         10
    Money market instruments more than one year                   -      4 612         33      4 645
    Redeemable preference shares                                  -        101         29        130
Total debt securities                                         1 821      8 971        119     10 911
Derivative instruments
  Fence structure                                                 -          -          6          6
Total derivative instruments                                      -          -          6          6
Short-term money market instruments                               -      1 981          -      1 981
Total financial assets at fair value through income           3 541     11 065      1 080     15 686

Financial liabilities at fair value through income

Debt securities                                               2 053          -          -      2 053
Investment contracts                                              -         84          -         84
Derivative instruments 
  Interest rate swaps                                             -          -          1          1
  Exchange traded futures                                         -          9          -          9
Total derivative instruments                                      -          9          1         10
Total financial liabilities at fair value through income      2 053         93          1      2 147


31 December 2016                                            Level 1    Level 2    Level 3      Total
Financial assets at fair value through income             R million  R million  R million  R million


Equity securities
  Quoted
    Listed                                                    1 321          -          -      1 321
    Unitised funds                                                -         77          -         77
    Irredeemable preference shares                                2          -          -          2
  Unquoted                                                        -          -      1 181      1 181
Total equity securities                                       1 323         77      1 181      2 581
Debt securities
  Quoted
    Government and other bonds                                    -      2 469          -      2 469
    Collateralised securities                                     -        407          -        407
    Unit-linked investments                                       -        268          -        268
    Money market instruments more than one year                   -      2 592          -      2 592
    Equity-linked notes                                           -        244          -        244
  Unquoted
    Government and other bonds                                    -        151          -        151
    Collateralised securities                                     -         10          -         10
    Money market instruments more than one year                   -      4 516          -      4 516
    Redeemable preference shares                                  -        163         29        192
Total debt securities                                             -     10 820         29     10 849
Derivative instruments
  Exchange traded futures                                         -          1          -          1
  Interest rate swaps(1)                                          -          -          -          -
Total derivative instruments                                      -          1          -          1
Short-term money market instruments                               -      1 361          -      1 361
Total financial assets at fair value through income           1 323     12 259      1 210     14 792

(1) Carrying value as at 31 December 2016 is less than R1 million.

Financial liabilities at fair value through income

Debt securities                                                   -      2 053          -      2 053
Investment contracts                                              -        101          -        101
Total financial liabilities at fair value through income          -      2 154          -      2 154

The following tables present the changes in level 3 instruments:

                                                                                                    Short-term
                                                                            Equity          Debt  money market
                                                                        securities    securities   instruments   Derivatives         Total
30 June 2017                                                             R million     R million     R million     R million     R million


Opening balance                                                              1 181            29             -             -         1 210
Acquisitions                                                                     2             -             -             -             2
Acquisition of subsidiary                                                        -            (4)            -             -            (4)
Gains recognised in profit or loss                                              88             -             -             -            88
Closing balance                                                              1 271            25             -             -         1 296

30 June 2016

Opening balance                                                              1 019            65            44            (1)        1 127
Acquisitions                                                                    48             -             -             -            48
Disposals/settlements                                                           (2)            -             -             -            (2)
Transfers between asset classes                                                  -            44           (44)            -             -
(Losses)/gains recognised in profit or loss                                   (110)           10             -             6           (94)
Closing balance                                                                955           119             -             5         1 079

31 December 2016

Opening balance                                                              1 019            65            44            (1)        1 127
Acquisitions                                                                   376             -             -             -           376
Disposals/settlements                                                           (2)            -             -           (75)          (77)
Transfers between asset classes                                                  -            44           (44)            -             -
Transfers to level 1 and/or 2                                                    -           (90)            -             -           (90)
(Losses)/gains recognised in profit or loss                                   (212)           10             -            76          (126)
Closing balance                                                              1 181            29             -             -         1 210

The unquoted equity instruments recognised as level 3 instruments consist mainly of the participation target shares issued by Sanlam Emerging Markets 
(Pty) Ltd (SEM). The Sanlam group entered into agreements in June 2017 to dispose of its various interests in the Enterprise Group in Ghana. In terms 
of the co-investment arrangement with SEM, Santam will share in the proceeds relating to the disposal of Enterprise Insurance Company Ltd. During the 
second half of 2016, Santam increased its participatory interest in Shriram General Insurance Company Ltd (SGI) by 8% to 15% at a cost of R251 million.

Of the R88 million gain (June 2016: R110 million loss; Dec 2016: R212 million loss) recognised on equity securities, an R87 million gain 
(June 2016: R110 million loss; Dec 2016: R212 million loss) relates to the SEM target shares, of which R17 million (June 2016: R39 million;  
Dec 2016: R145 million) relates to foreign exchange losses, and R104 million to an increase (June 2016: R71 million to a decrease; Dec 2016: R67 million
to a decrease) in fair value in local currency terms. Key drivers of the fair value movements of Santam's share of the SEM investment portfolio were:
- A downward adjustment to the value of the P&O business in Malaysia of R14 million due to lower premium growth in competitive market conditions. There is a
  significant focus on expanding the current P&O product offering, and growth reported on non-motor business lines was positive.
- An increase in the value of Shriram General Insurance Company Ltd of R42 million was mainly attributed to good performance achieved in the Indian insurance
  market.
- An increase in the value of Enterprise Insurance Company Ltd of R38 million based on the estimated transaction proceeds.

The fair value of the SEM target shares is determined using predominantly discounted cash flow models. The most significant assumptions used in these
models are the discount rate, exchange rate and net insurance margin expectations. Should the discount rates increase or decrease by 10%, the cumulative
value of the most significant target shares would decrease by R151 million (June 2016: R108 million; Dec 2016: R140 million) or increase by R228 million
(June 2016: R159 million; Dec 2016: R213 million), respectively. If the relative foreign exchange rates increase or decrease by 10%, the cumulative fair
values will increase or decrease by R89 million (June 2016: R68 million; Dec 2016: R85 million). Should the net insurance margin profile (projected over 
a period of 10 years) increase or decrease by 10%, the cumulative fair values will increase by R98 million (June 2016: R72 million; Dec 2016: R91 million) 
or decrease by R98 million (June 2016: R73 million; Dec 2016: R90 million), respectively.

At 30 June 2017, the group had exchange traded futures with an exposure value of R408 million (June 2016: R561 million; Dec 2016: R345 million). The group
also had interest rate derivative assets as part of the international bond portfolio with a gross exposure asset and liability at 30 June 2017 of R26
million (June 2016: R29 million; Dec 2016: R27 million) and R26 million (June 2016: R30 million; Dec 2016: R27 million) respectively.

The interest rate derivative liabilities represented the fair value of interest rate swaps effected on a total of R100 million (June 2016: R100 million;
Dec 2016: R100 million) of fixed interest securities held in the investment portfolio underlining the subordinated callable notes. The interest rate swaps
had the effect of swapping a variable interest rate for a fixed interest rate on these assets to eliminate interest rate risk on assets supporting the bond
liability. The derivatives matured on 12 June 2017. The gross exposure asset and liability at 30 June 2016 amounted to R6 million (Dec 2016: R3 million)
and R7 million (Dec 2016: R3 million) respectively.

During 2007, the company issued unsecured subordinated callable notes to the value of R1 billion in two tranches. The fixed effective rate for the R600
million issue was 8.6% and 9.6% for the second tranche of R400 million, representing the R203 companion bond plus an appropriate credit spread at the time
of the issues. The fixed coupon rate, based on the nominal value of the issues, amounts to 8.25% and for both tranches the optional redemption date is 
15 September 2017. Between the optional redemption date and final maturity date of 15 September 2022, a variable interest rate (JIBAR-based plus additional
margin) will apply. It is the group's intention to redeem both tranches on 15 September 2017.

During April 2016, the company issued additional unsecured subordinated callable notes to the value of R1 billion in two equal tranches of fixed and
floating rate notes. The effective rate for the floating rate notes represents the three-month JIBAR plus 245 basis points, while the rate for the fixed
rate notes amounted to 11.77%. The floating rate notes have an optional redemption date of 12 April 2021 with a final maturity date of 12 April 2026, 
and the fixed rate notes an optional redemption date of 12 April 2023 with a final maturity date of 12 April 2028.

During June 2017, the company issued additional unsecured subordinated callable floating rate notes to the value of R1 billion in anticipation of the
redemption of the R1 billion subordinated debt issued in 2007. The effective interest rate for the floating rate notes represents the three-month JIBAR plus
210 basis points. The notes have an optional redemption date of 27 June 2022 with a final maturity date of 27 June 2027.

Per the conditions set by the Regulator, Santam is required to maintain liquid assets equal to the value of the callable notes until maturity. The callable
notes are therefore measured at fair value to minimise undue volatility in the statement of comprehensive income. The fair value of the fixed rate notes is
calculated using the yield provided by BESA and adding accrued interest. The fair value of the floating rate notes is calculated using the price provided by
BESA and adding accrued interest.

In May 2016, a zero-cost fence structure 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 matured on 15 December 2016 (resulting in a realised gain of R75 million) and was
not renewed. These were economic hedges over R1 billion of the listed equity portfolio.

On 31 July 2017, a zero-cost collar structure on equities to the value of R1.2 billion was entered into based on the SWIX 40, providing full downside
protection from the implementation level of 10 972, with upside participation (excluding dividends) of 2.2%. The structure will mature on 21 December
2017.


                                                                                   Reviewed at   Reviewed at    Audited at
                                                                                  30 June 2017  30 June 2016   31 Dec 2016
                                                                                     R million     R million     R million


7.  Insurance liabilities and reinsurance assets
Gross insurance liabilities
Long-term insurance contracts
- claims reported and loss adjustment expenses                                              39             8            25
- claims incurred but not reported                                                          44            30            42
General insurance contracts
- claims reported and loss adjustment expenses                                           9 031         6 972         6 789
- claims incurred but not reported                                                       2 242         1 762         1 873
- unearned premiums                                                                      6 262         4 228         4 867
Total gross insurance liabilities                                                       17 618        13 000        13 596
  Non-current liabilities                                                                1 701         1 423         1 312
  Current liabilities                                                                   15 917        11 577        12 284

Recoverable from reinsurers
Long-term insurance contracts
- claims reported and loss adjustment expenses                                              17             4             6
- claims incurred but not reported                                                          12             7            12
General insurance contracts
- claims reported and loss adjustment expenses                                           4 304         2 781         2 835
- claims incurred but not reported                                                         467           289           329
- unearned premiums                                                                      1 157         1 036         1 307
Total reinsurers' share of insurance liabilities                                         5 957         4 117         4 489
  Non-current assets                                                                       279           164           140
  Current assets                                                                         5 678         3 953         4 349

Net insurance liabilities
Long-term insurance contracts
- claims reported and loss adjustment expenses                                              22             4            19
- claims incurred but not reported                                                          32            23            30
General insurance contracts
- claims reported and loss adjustment expenses                                           4 727         4 191         3 954
- claims incurred but not reported                                                       1 775         1 473         1 544
- unearned premiums                                                                      5 105         3 192         3 560
Total net insurance liabilities                                                         11 661         8 883         9 107

8. Non-current assets held for sale
Santam Ltd initially set up the Santam International group in 2002 to facilitate the expansion into Europe. Santam International Ltd (Santam International)
directly and indirectly held three subsidiaries called Santam UK Ltd, Westminster Motor Insurance Agency Ltd (WMIA) and Santam Europe Ltd (Europe). The
holdings in WMIA and Europe were sold in 2008 and Santam International only retained deferred conditional rights relating to the sale contracts. WMIA and
Europe were renamed subsequent to the sale to Cardrow Insurance Ltd (Cardrow) and Beech Hill Insurance Ltd (Beech Hill), respectively.

The deferred conditional rights relating to Cardrow were realised during the first half of 2016 when it paid a dividend of R394 million. The deferred
conditional rights relating to Beech Hill were substantially realised during the second half of 2016 with the receipt of a distribution of R115 million. 
The remaining balance of R8 million was realised during the first half of 2017. The winding up of the Santam International group resulted in the release 
of the foreign currency translation reserve relating to the investment in Santam International of R175 million (refer to note 9).


                                                                                              Reviewed at       Reviewed at        Audited at
                                                                                             30 June 2017      30 June 2016       31 Dec 2016
                                                                                                R million         R million         R million
Assets that are classified as held for sale
Financial assets at fair value through income
Loans and receivables including insurance receivables                                                   -               125                 8
                                                                                                        -               125                 8

Opening balance                                                                                         8               541               541
Settlements                                                                                            (8)             (394)             (509)
Dividend income                                                                                         -               394               394
Foreign exchange losses                                                                                 -               (35)              (37)
Net fair value losses                                                                                   -              (381)             (381)
Closing balance                                                                                         -               125                 8


                                                                                                  Reviewed          Reviewed           Audited
                                                                                          Six months ended  Six months ended        Year ended
                                                                                              30 June 2017      30 June 2016       31 Dec 2016
                                                                                                 R million         R million         R million


9.  Investment income and net gains/(losses) on financial assets and liabilities
Investment income                                                                                      590               441               777
  Dividend income                                                                                       37                36                64
  Interest income                                                                                      606               451               941
  Foreign exchange differences                                                                         (53)              (46)             (228)
Net gains on financial assets and liabilities at fair value through income                             153               101                42
  Net realised gains on financial assets                                                                21                27               284
  Net fair value gains/(losses) on financial assets designated as at fair value through income         143                98              (300)
  Net realised/fair value gains/(losses) on derivative instruments                                       5                (5)               75
  Net fair value (losses)/gains on short-term money market instruments                                  (2)               12                14
  Net fair value losses on financial liabilities designated as at fair value through income            (14)              (31)              (31)
    Net fair value losses on debt securities                                                           (14)              (31)              (31)


Investment income and net losses on financial assets held for sale(1)                                  175                13                13
  Dividend income                                                                                        -               394               394
  Net fair value losses                                                                                  -              (381)             (381)
  Foreign currency translation reserve reclassified to profit and loss                                 175                 -                 -
 
                                                                                                       918               555               832

(1) Foreign exchange differences includes R175 million relating to the release of the foreign currency translation reserve relating to Santam
    International. Dividend income for the group in prior periods includes a dividend of R394 million resulting from the realisation of the value
    in the non-current assets held for sale relating to Cardrow. This resulted in the net fair value of the related investment being reduced by 
    R381 million. Please refer to note 8 for more detail.


                                                                                                  Reviewed          Reviewed           Audited
                                                                                          Six months ended  Six months ended        Year ended
                                                                                              30 June 2017      30 June 2016       31 Dec 2016
                                                                                                 R million         R million         R million


10.  Income tax
Normal taxation
  Current period                                                                                       118               228               553
  Prior period                                                                                           -                 -                (8)
  Recovered from cell owners                                                                           (41)              (54)              (89)
Foreign taxation - current period                                                                       28                33                56
Total income taxation for the period                                                                   105               207               512

Deferred taxation
  Current period                                                                                       121               129                12
  Recovered from cell owners                                                                            (2)                -                 -
Total deferred taxation for the period                                                                 119               129                12

Total taxation as per statement of comprehensive income                                                224               336               524

Reconciliation of taxation rate (%)
Normal South African taxation rate                                                                    28.0              28.0              28.0
Adjusted for:
  Disallowable expenses                                                                                0.2               0.6               0.6
  Foreign tax differential                                                                             0.4               0.5               0.4
  Exempt income                                                                                       (1.3)             (1.5)             (1.4)
  Investment results                                                                                  (1.3)              0.1              (0.5)
  Change in CGT inclusion rate(1)                                                                        -               4.1               2.4
  Income from associates and joint ventures                                                           (1.9)             (1.3)             (1.1)
  Exempt foreign currency translation                                                                 (2.3)                -                 -
  Previous periods' overprovision                                                                        -                 -              (0.4)
  Other permanent differences                                                                         (0.2)              0.1               0.1
  Other taxes                                                                                          0.1                 -               0.1
Net (reduction)/increase                                                                              (6.3)              2.6               0.2
Effective rate (%)                                                                                    21.7              30.6              28.2

(1) The increase in the CGT inclusion rate resulted in an increase in the deferred tax provision on 
    fair value movements in prior periods of R45 million.

11. Corporate transactions
2017
Acquisitions
Santam Structured Insurance (Pty) Ltd
During March 2017, the Santam group acquired a shareholding of 100% in RMB-SI Investments (Pty) Ltd (now Santam Structured Insurance (Pty) Ltd (SSI)) for
R193 million in cash. Key SSI management obtained a 10% economic participation interest in SSI at acquisition date for R20 million. The 10% participatory
interest is included as a liability under provisions.

                                                                                                                  R million


Details of the assets and liabilities acquired (based on provisional purchase price allocation) are as follows:
Property and equipment                                                                                                   15
Investment in associates and joint ventures                                                                              17
Financial assets at fair value through income                                                                         4 341
Reinsurance assets                                                                                                      391
Deferred acquisition costs                                                                                                9
Loans and receivables including insurance receivables                                                                   519
Cash and cash equivalents                                                                                             1 045
Deferred income tax                                                                                                     (86)
Cell owners' interest                                                                                                (1 849)
Financial liabilities at fair value through income                                                                   (1 551)
Insurance liabilities                                                                                                (2 242)
Deferred reinsurance acquisition revenue                                                                                 (2)
Provisions for other liabilities and charges                                                                            (30)
Trade and other payables including insurance payables                                                                  (350)
Current income tax liabilities                                                                                          (14)
Net asset value acquired                                                                                                213
Long-term incentive scheme                                                                                              (20)
Purchase consideration paid                                                                                             193

SAN JV (RF) (Pty) Ltd
Effective 10 May 2017, SEM and Santam through its investment in SAN JV (RF) (Pty) Ltd (SAN JV), acquired a further 16.6% interest in Saham Finances via a
subscription for new shares for US$351 million (R4.8 billion). Santam's share of the purchase price, including transaction costs, was US$11 million (R152 million). 
Santam's interest in SAN JV therefore diluted to 15% (previously 25%). As a result of the dilution, R90 million of the foreign currency translation reserve relating
to SAN JV was released to profit or loss. An R18 million gain on dilution was also recognised.

Professional Provident Society Short-term Insurance Company Ltd (PST)
During March 2017 and June 2017 a pro rata recapitalisation took place in terms of which Santam injected a further R8.3 million and R5.4 million
respectively into the company.

Disposals
Paladin Underwriting Managers (Pty) Ltd
During January 2017, the group sold its 40% shareholding in Paladin Underwriting Managers (Pty) Ltd for R23 million. The net profit realised was R5 million
and capital gains tax of R2 million was recognised.


2016
Acquisitions
SAN JV (RF) (Pty) Ltd
The transaction to acquire a 25% shareholding in SAN JV (with SEM acquiring 75%), announced in November 2015, was finalised during the first quarter of
2016. The total cash consideration was US$400 million. Santam's share of the purchase consideration, amounting to US$100 million, was funded from internal
cash resources. In November 2015, Santam acquired sufficient foreign currency, in addition to existing dollar assets, to cover the purchase consideration
before the transaction was concluded. A cash flow hedge was implemented on 24 November 2015 to cover Santam's foreign currency exposure by designating these
US dollar-denominated cash balances to the transaction. The impact of this was that foreign currency gains of R140 million (for the periods ended 
31 December 2016 and 30 June 2016) recognised on the designated cash balances since implementation date were not recognised in the statement of comprehensive
income, but were accounted for as part of the investment in SAN JV. Therefore, the cost price of the investment, net of the cash flow hedge impact, was 
R1 412 million.

Professional Provident Society Short-term Insurance Company Ltd (PST)
During March 2016, Santam purchased 49% of PST for R55 million in cash. During November 2016 a pro rata recapitalisation took place in terms of which
Santam injected a further R10 million into the company.

Absa Intermediated Commercial Lines business
During November 2016, Santam purchased the Absa Intermediated Commercial Lines business from Absa Insurance Company Ltd for R13 million in cash, including
contingent payments estimated at R28 million.

                                                                                                       R million


Details of the assets and liabilities acquired are as follows:
Intangible assets - key business relationships                                                                59
Cash and cash equivalents                                                                                     83
Insurance liabilities                                                                                        (83)
Trade and other payables                                                                                      (2)
Deferred tax liabilities                                                                                     (16)
Net asset value acquired                                                                                      41
Future contingent consideration payable                                                                      (28)
Purchase consideration paid                                                                                   13

Disposals
Indwe Broker Holdings Group (Pty) Ltd
On 31 December 2015, Santam Ltd, as well as Swanvest 120 (Pty) Ltd, Main Street 409 (Pty) Ltd and Thebe Risk Services Holdings (Pty) Ltd (all wholly-owned
subsidiaries of Santam Ltd) sold 26.34%, 13.82%, 16.8% and 19.04% respectively of their shareholding in Indwe Broker Holdings Group (Pty) Ltd to Sanlam Life
Insurance Ltd (25%) and African Rainbow Capital (Pty) Ltd (51%) for R208 million in total. The net profit realised was R15 million and capital gains tax of
R5 million was recognised. The remaining 24%, held by Swanvest 120 (Pty) Ltd, was classified as a joint venture and remeasured to fair value, resulting in a
gain of R3 million (included in the profit on sale).

                                                                                                       R million
Details of the assets and liabilities disposed of are as follows:

Property and equipment                                                                                        23
Intangible assets                                                                                            223
Deferred taxation                                                                                              5
Loans and receivables                                                                                          6
Cash and cash equivalents                                                                                    183
Provisions for other liabilities and charges                                                                  (1)
Trade and other payables                                                                                    (170)
Current income tax liabilities                                                                               (10)
Net asset value disposed of                                                                                  259
Profit on sale                                                                                                15
Less: Fair value of remaining investment                                                                     (66)
Less: Purchase price receivable                                                                             (208)
Purchase consideration received                                                                                -

The purchase consideration was received in 2016.

                                                                                         Reviewed at       Reviewed at        Audited at
                                                                                        30 June 2017      30 June 2016       31 Dec 2016
                                                                                           R million         R million         R million


Goodwill reconciliation
Opening balance                                                                                  595               598               598
Impairment                                                                                        (1)               (1)               (3)
Closing balance                                                                                  594               597               595

                                                                                            Reviewed          Reviewed           Audited
                                                                                    Six months ended  Six months ended        Year ended
                                                                                        30 June 2017      30 June 2016       31 Dec 2016
                                                                                           R million         R million         R million


12.  Earnings per share
Basic earnings per share
Profit attributable to the company's equity holders (R million)                                  753               697             1 212
Weighted average number of ordinary shares in issue (million)                                 110.26            110.19            110.21
Earnings per share (cents)                                                                       683               633             1 100

Diluted earnings per share
Profit attributable to the company's equity holders (R million)                                  753               697             1 212
Weighted average number of ordinary shares in issue (million)                                 110.26            110.19            110.21
Adjusted for share options                                                                      1.02              1.04              1.16
Weighted average number of ordinary shares for diluted earnings per share (million)           111.28            111.23            111.37

Diluted basic earnings per share (cents)                                                         677               627             1 088

Headline earnings per share
Profit attributable to the company's equity holders (R million)                                  753               697             1 212
Adjusted for:
  Impairment of goodwill and other intangible assets                                               7                 1                 3
  Reclassification of foreign currency translation reserve on dilution of associate               90                 -                 -
  Gain on dilution of associate                                                                  (18)                -                 -
  Profit on sale of associates                                                                    (5)                -                 -
  Tax charge on profit on sale of associates                                                       2                 -                 -
  Capital gains tax overprovision on sale of associates                                            -                 -               (18)
  Foreign currency translation reserve reclassified to profit and loss                          (175)                -                 -
Headline earnings (R million)                                                                    654               698             1 197

Weighted average number of ordinary shares in issue (million)                                 110.26            110.19            110.21
Headline earnings per share (cents)                                                              593               633             1 086

Diluted headline earnings per share
Headline earnings (R million)                                                                    654               698             1 197
Weighted average number of ordinary shares for diluted headline earnings per share (million)  111.28            111.23            111.37
Diluted headline earnings per share (cents)                                                      588               628             1 075

13.  Dividend per share
Dividend per share (cents)                                                                       336               311               881
Special dividend per share (cents)                                                                 -               800               800

14. Events after the reporting period
The group entered into a zero-cost collar on 31 July 2017 over R1.2 billion of listed equity investments, and locked in an investment return of 10.5% for
the year to date, with further upside participation (excluding dividends) of 2.2%. The structure matures on 21 December 2017.

There have been no other material changes in the affairs or financial position of the company and its subsidiaries since the statement of financial position
date.


ADMINISTRATION

NON-EXECUTIVE DIRECTORS
B Campbell, BTPKM Gamedze, GG Gelink (chairman), IM Kirk, MLD Marole, NV Mtetwa, Y Ramiah,  MJ Reyneke, PE Speckmann, HC Werth

EXECUTIVE DIRECTORS
L Lambrechts (chief executive officer),
HD Nel (chief financial officer)

COMPANY SECRETARY
M Allie

TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
PO Box 61051, Marshalltown 2107
Tel: 011 370 5000
Fax: 011 688 7721
www.computershare.com

SANTAM HEAD OFFICE AND REGISTERED ADDRESS
1 Sportica Crescent
Tyger Valley, Bellville 7530
PO Box 3881, Tyger Valley 7536
Tel: 021 915 7000
Fax: 021 914 0700
www.santam.co.za

Registration number: 1918/001680/06
ISIN: ZAE000093779
JSE share code: SNT
NSX share code: SNM

SPONSOR
Investec Bank Ltd

Santam is an authorised financial services provider (licence number 3416).

INSURANCE GOOD AND PROPER
www.santam.co.za

Date: 31/08/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story