Santam’s specialist business sees marked slowdown in growth
Santam’s specialist business has experienced a marked slowdown in growth since it reported its 2017 interim results, the country’s largest short-term insurer said on Wednesday.
This was due to the difficult economic environment, subdued commodity prices impacting the crop business, and increasing competition, Santam said in a trading update.
Santam’s specialist business comprises a number of underwriting management agencies that focus on niche lines of insurance, such as engineering, corporate property and liability. The risks covered tend to be large and complex, commanding a high premium, which has attracted the interest of a growing number of insurers.
Santam said its subsidiary MiWay reported lower growth, but maintained strong underwriting results. Santam’s underwriting margin — the difference between what it collects in premiums and what it pays out in claims and claims costs — for the 10 months to October remained at the lower end of its 4% to 8% target.
Underwriting results were boosted by the treatment of the Cape Town storms and Knysna fires as one insurance event with its lead re-insurers. The claims environment remained challenging following weather-related catastrophes in Johannesburg and Durban on October 9, Santam said, referring to the extreme storms.
Santam’s commercial and personal business continued to report "satisfactory" growth in premium, driven by an increase in policy count and premium increases.