Santam kept the underwriting margin in its conventional insurance business above the midpoint of its 5% to 10% target range in the first half of 2026, despite weather-related catastrophe losses and other large claims increasing from R144 million to R1.5 billion.
Significant losses were incurred in storms in Limpopo in February and the Western Cape in May. The sharp increase in claims came against a particularly benign claims environment in the first half of 2025.
In an operational update published on 26 August 2026, Santam said its attritional claims experience remained positive, which it attributed to the improved underlying profitability of its in-force book following underwriting actions implemented over the past few years, as well as diligent expense management.
The effect of the large claims was partly offset by a reduction in the group’s reserving confidence level, which had a positive earnings impact of about R325m.
The result came as the conventional insurance business recorded 10% growth in gross written premium (GWP), with all businesses contributing to the increase. Miway, Santam Direct, Santam Re, and Santam Partner Solutions achieved double-digit growth.
However, growth in South Africa’s traditional intermediated market slowed, with Santam citing softer renewal increases and heightened competition in commercial lines.
Santam Specialist Solutions’ growth trajectory also improved from the end of the 2025 financial year, enabling it to contribute growth despite continued pressure from the softer premium-rate cycle.
Syndicate 1918 records maiden underwriting loss
Santam’s Lloyd’s syndicate, Syndicate 1918, recorded a maiden underwriting loss of R230m during the period.
The syndicate concluded business with expected GWP of R1.3bn by the end of June. Because the business written to date comprised mostly consortia and facility lines, recognition of GWP is deferred over a period of 12 months. Santam recognised R461m of GWP during the period.
Santam attributed the underwriting loss to delayed revenue recognition under IFRS and said the syndicate is expected to contribute positively to the group’s underwriting results on a year-of-account basis.
Investment returns support earnings
Investment returns also contributed to the group’s performance.
The investment return earned on insurance funds, as a percentage of net earned premium, outperformed the comparable period, supported by good returns from fixed-interest markets and investment managers outperforming their benchmarks.
The investment return on Santam’s capital portfolios increased significantly, helped by a marked decline in foreign-currency translation losses and a one-off revaluation of its investment in Shriram General Insurance (SGI).
Following the Sanlam Group’s acquisition of a majority stake in SGI, the minority discount incorporated in the valuation was reduced. This resulted in a one-off R590m upward revaluation of Santam’s investment.
The revaluation supported an increase in earnings attributable to Santam’s shareholders compared with the prior period.
Santam’s Alternative Risk Transfer business also maintained its solid performance, contributing double-digit earnings growth.
Santam said all key financial performance metrics met or exceeded its long-term targets during the period, despite a challenging macro-economic environment, investment-market volatility, and significant weather-related and other large claims.
The operational update provides a preview of the group’s performance ahead of its full interim results, which Santam expects to release on or about 3 September 2026.
