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...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now