Less catastrophe-prone year gives Santam reason to celebrate
The absence of significant catastrophe-linked claims in contrast to the severe Knysna fire in June 2017 helped Santam report a 46% jump in net profit for the first half of its financial year.
Sanlam’s short-term insurance subsidiary reported net profit of R1.2bn for the six months to end-June compared with R808m in the matching period.
Headline earnings per share (HEPS) grew an even more impressive 72% to R10.18 from R5.93.
Santam declared an interim dividend of R3.63, an 8% increase from R3.36 in the first half of its 2017 financial year.
The insurance industry calls its top line "gross written premium", which grew 13% to R15.6bn.
The group said its vehicle insurance arm, MiWay, "saw a slowdown in growth due to an increased focus on profitability, as well as the impact of the economic strain on consumers".
"MiWay reported acceptable results with a claims ratio of 55.7% from 55.4% in 2017, however, negatively impacted by lower premium growth and increased management expenses, contributing an underwriting profit of R159m, down from R179m," Santam CEO Ian Kirk said in the results statement.
The crop insurance business reported strong underwriting results, although lower than the excellent results reported in the comparative period.