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Operational update for the three months ended 31 March 2026
SANTAM LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1918/001680/06
LEI: 37890092DC55C7D94B35
JSE Share Code: SNT & ISIN: ZAE000093779
A2X Share Code: SNT
NSX Share Code: SNM
Bond Company Code: BISAN
("Santam" or "the Group")
OPERATIONAL UPDATE FOR THE THREE MONTHS ENDED 31 MARCH 2026
This is a general communication to Santam shareholders and noteholders covering
the operational performance of the Group for the three months ended 31 March 2026
(the "period"). Unless the context indicates otherwise, references to the comparable
period are to the three months ended 31 March 2025.
The Group achieved a solid performance during the period, with gross written
premium, underwriting margin and return on capital meeting Santam's long-term
targets despite significant weather-related and other large claims incurred during the
period.
Conventional insurance business
The conventional insurance business achieved 9% growth in gross written premium,
with solid contributions from all businesses albeit a slower start in the international
portfolio. The Direct businesses continued to deliver strong growth, with both Miway
and Santam Direct achieving double-digit growth in gross written premiums. Net
earned premium growth was muted due to the pressure on Santam Specialist
Solutions' growth in the second half of the 2025 financial year and the slower start to
the year at Santam Re. Santam Re was also negatively impacted by foreign currency
translation differences in respect of premiums written in prior years. Partnership
business concluded in the first quarter is expected to contribute to good growth at
Santam Re for the remainder of the year.
The underwriting performance for the period was adversely impacted by weather-
related and other large losses net of reinsurance of approximately R430 million. The
majority of these claims relate to flooding in the northern part of South Africa and
wildfires in the Western Cape. In contrast, the comparable period benefited from the
absence of significant loss events. Despite these large losses, the overall Group net
underwriting margin for the period was above the mid-point of the 5% to 10% target
range.
Negative fixed interest-rate market returns in March 2026 suppressed investment
returns earned on insurance funds, compared to strong returns in the comparable
period. The portfolio positioning and duration remains conservative, which protected
the overall return on insurance funds to some 2% of net earned premium.
Alternative Risk Transfer ("ART") business
The ART business segment reported good operating results, with steady fee income
and underwriting results, offset by lower investment margins as a result of the weaker
fixed-interest rate market performance for the period compared to 2025.
Shareholder investment returns
The investment return earned on the Group's capital portfolios was below expectations
due to the underperformance in fixed-interest rate markets, compared to favourable
returns in the comparable period. The overall performance was, however, in line with
the first quarter of 2025 due to foreign currency gains in the period compared to
significant foreign currency losses in the first quarter of 2025.
Capital position
The Group's economic capital cover ratio remains well within the 145% to 165% target
range following the final dividend payment in March 2026.
Prospects
The Syndicate started writing business on 1 January 2026, with committed and written
lines of approximately US$55 million concluded up to the 1 May 2026 renewal cycle.
This represents incremental new business to the Group and excludes the cession of
existing business into the Syndicate. Most of the business concluded by the Syndicate
in the first three months of 2026 relates to consortia and facilities lines, which have a
slower recognition profile for gross written premium than annual open market
business. The Syndicate commensurately did not have a significant impact on
premium growth for the period, but recognised gross written premium is expected to
accelerate in the remainder of the 2026 financial year as the timing differences unwind.
The Syndicate is commensurately expected to contribute strongly to premium growth
in the remainder of the year. It is still anticipated to contribute an approximate R300
million operational loss in 2026. This loss is dependent on the amount and timing of
the new business generation and currency fluctuations.
During the period, Santam was also granted a licence to establish a reinsurance
branch in India's Gujarat International Finance Tec-City ("GIFT City"), India's first
operational greenfield smart city and International Financial Services Centre. This
development is aligned with our FutureFit 2030 ambitions and goal to drive
international growth and diversification.
The Group has not been notified of any significant claims from the flooding in the
Western Cape in April 2026. We anticipate significant claims from the widespread
damage caused by the severe weather conditions in the Western Cape in May. It is,
however, too early in the claims notification process to determine an accurate loss
assessment. The conventional insurance underwriting performance for the remainder
of the year also remains susceptible to adverse weather-related and other significant
loss experience. Additionally, investment market volatility could potentially impact the
investment returns earned on insurance funds and the shareholder capital portfolio.
These factors may impact earnings growth for the full year.
The strength of our client and intermediary relationships and a superior distribution
footprint position us well to maintain a solid financial performance as we focus on
enhancing Santam's international growth and diversification. Profitable growth
remains a key focus area for all businesses, especially in light of the upside risk to
claims inflation and the pressure on personal disposable income following the spike in
international oil prices.
The financial information included in this announcement has not been reviewed or
reported on by Santam's external auditors.
Shareholders and noteholders are further advised that Santam's results for the six
months ending 30 June 2026 are expected to be released on SENS on or about 7
September 2026.
18 May 2026
Equity and Debt Sponsor: Investec Bank Limited
NSX Sponsor: Simonis Storm Securities (Pty) Ltd (a member of the Namibian Securities Exchange)
Date: 18-05-2026 03:00:00
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