Much of the insurance game is about luck, for both the insurer and the client. Many customers of market leader Santam — which has about a 22% market share — would have insured for 2017’s catastrophes such as the Knysna fire and widespread hailstorms in Gauteng. The key measure for short-term insurers is the underwriting ratio, or the surplus left over once claims and expenses have been paid. For Santam this increased from 6% in 2017 to 9.2% in the year to December 2018. Insurers can reduce the volatility of returns through reinsurance, which Santam has maintained at about 18.5% of premiums, mainly for catastrophe cover. Santam CEO Lizé Lambrechts says: "We also helped our returns … by helping our clients manage their commercial fire risks, and by cancelling cover in the most risky cases." She says that there is still a sizeable risk protection gap; it is estimated that only a third of the cars on SA’s roads are insured.

Yet gross written premium was up a modest but satisfactor...

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