Santam has delivered one of its strongest underwriting performances in years, with margins exceeding target levels and return on capital approaching 30%.
The insurer released its results for the year to the end of December 2025 on 9 March, reporting strong growth across key metrics. Net earned premium increased 14.7%, gross written premium (GWP) rose 6.4%, and the group achieved an underwriting margin of 11.3%, well above its long-term target range.
Return on capital reached 29.2%, exceeding the group’s 24% hurdle rate, while the board declared a final dividend of 1 090 cents per share, up 10.7%.
Chief executive Tavaziva Madzinga (pictured) described the year as a milestone for the group’s strategy.
“2025 has been a defining year for Santam. Our FutureFit 2030 strategy is bearing fruit, we delivered strong financial results, and our underwriting discipline and portfolio actions across personal, commercial, and specialist lines yielded strong results,” he said.
Profitability comfortably exceeds targets
One of the most notable features of the results is that Santam exceeded its long-term profitability benchmarks.
Return on capital reached 29.2%, well above the group’s 24% hurdle rate, while the underwriting margin of 11.3% exceeded the insurer’s target range of 5% to 10%. The group’s combined ratio improved to 88.7%, compared with 92.4% the previous year, reflecting stronger underwriting performance and lower claims costs.
The report states that premium growth occurred “despite competitive pressure on specialist classes in South Africa”.
It also says Santam “moderated market share in specialist lines of business where we were not prepared to follow unsustainable market pricing”.
Profit growth driven by underwriting momentum
Santam’s headline earnings and profits also increased.
Profit attributable to shareholders rose to R4.06 billion, up from R3.68bn in 2024, while headline earnings per share increased to 3 743 cents, an 8% rise. Total net income reached R5.07bn, representing 10% growth year on year.
Much of the improvement came from core insurance operations, where the net insurance result from conventional business increased by 61%, supported by favourable claims experience and lower weather-related losses.
Investment returns on capital were affected by R1bn in foreign-currency losses, while the group incurred R325 million in once-off project expenses linked to strategic initiatives, including the establishment of its Lloyd’s syndicate.
Read: Exemption opens Lloyd’s specialist insurance to SA market
Broker channel remains central to distribution strategy
Although the group has expanded direct and partnership channels, it emphasised that brokers remain central to its distribution strategy.
The directors’ report notes that Santam maintained its leading position in the broker distribution channel across personal and commercial lines while continuing to expand its direct presence and enter under-penetrated consumer segments.
Broker-linked operations continued to show solid momentum. The group reported that its Broker Solutions and Client Solutions divisions delivered solid growth in GWP despite moderating premium rate increases following underwriting interventions implemented since 2022.
Improving policy retention also supported profitability. Persistency improved across commercial and personal lines compared with 2024, typically associated with stable broker-client relationships and lower acquisition costs.
The stronger retention and disciplined underwriting translated into improved financial outcomes. Santam achieved an underwriting margin of 11.3% in 2025, up from 7.6% in 2024, supported in part by a favourable claims environment that benefited the Broker and Client Solutions businesses.
Premium growth reflects selective underwriting
Premium growth remained solid but measured, reflecting Santam’s emphasis on underwriting discipline rather than pursuing market share at any cost.
GWP increased 6.4% to R43.96bn, while net earned premium rose 14.7% to R36.92bn.
The sharper rise in net earned premium largely reflects the structure of new business written through Santam Re partnerships, which affected the timing and recognition of premium income. The group said sizeable new partnership transactions written through Santam Re were the main reason net earned premium grew significantly faster than gross written premium during the year.
Underlying business volumes nevertheless continued to expand steadily. Over the longer term, the group’s conventional insurance book has grown from R24.3bn in GWP in 2020 to R36.9bn in 2025.
At the same time, Santam deliberately moderated its exposure in areas where pricing discipline weakened. Management said it reduced market share in certain specialist lines where it was not prepared to follow unsustainable market pricing, emphasising that the group’s priority remains profitable, long-term growth rather than volume-driven expansion.
Direct and partnership channels gaining traction
Santam is also expanding its reach through additional distribution channels as part of its broader diversification strategy.
The group’s direct insurer, Miway, recorded 15% growth in GWP in 2025, supported by record new business sales and continued momentum from inbound and tied agency strategies introduced in 2023.
Operational initiatives also played a role in driving growth. Miway’s Micashback value proposition, launched during the year, gained traction, with about 78% of policies already activated by the end of 2025, while the remainder are expected to transition at renewal dates during 2026.
Partnership-driven distribution is also expanding. The Partner Solutions business benefited from the first-time inclusion of the MultiChoice insurance book from May 2025.
Device insurance partnerships also continued to scale. Policies sold through MTN approached 600 000, reflecting growing demand for embedded insurance products distributed through mobile and digital ecosystems.
Direct channels contributed 22% of business in 2025 as Santam moves toward its longer-term diversification target of more than 30%.
International growth becoming central to strategy
International expansion is becoming an increasingly important pillar of Santam’s growth strategy.
In 2025, business written outside South Africa contributed 19% of GWP, up from 18% the previous year, with international premiums growing 14% to R8.4bn, compared with R35.5bn generated domestically.
Growth in cross-border operations is being supported by Santam Re and the group’s specialist underwriting businesses, which together increased their non-South African GWP by 11% to R6.8bn, with Santam Re accounting for roughly 80% of that business.
A major strategic milestone is the launch of Santam Syndicate 1918 at Lloyd’s of London, which received final approval during 2025 and began underwriting business on 1 January 2026. The group transferred R2.2bn in capital to support the new syndicate.
Santam is also building additional international capability through targeted investments. During 2025 the group acquired a 51% stake in Avatar Holdings in the United Kingdom for £3m, a start-up underwriting technology platform designed to price and manage mid-sized corporate risks more efficiently in large markets such as the United States.
The group has further strengthened its reinsurance footprint by establishing operations in India’s Gujarat International Financial Services Centre (GIFT City).
Favourable claims environment supported margin
A relatively benign claims environment also contributed to stronger underwriting results.
Weather-related losses declined by approximately R600m compared with 2024.
Santam cautioned that this environment may not persist. The insurer noted that extreme weather events have become more frequent and severe.
Early indications in 2026 suggest a return to more typical conditions. Flooding in northern South Africa and wildfires in the Western Cape generated about R300m in losses during the first two months of the year.
Investment volatility remains a factor
Investment returns remain an important contributor to Santam’s profitability.
During 2025 the group recorded foreign-currency losses of about R1bn, largely because of the strengthening of the rand against major currencies. The results note that “investment return on capital was negatively impacted by R1bn of foreign currency losses”, reversing gains recorded in the prior year.
Part of the impact relates to Santam’s international investments, including R420m in currency losses linked to its stake in Shriram General Insurance in India.
The group also held surplus foreign assets during the year in anticipation of the launch of Santam Syndicate 1918, which required capital to be deployed offshore. As part of that process, R2.2bn in capital was transferred to the syndicate at year-end.
Santam noted that excluding these items, net investment return was broadly in line with 2024.
Strong capital base supports dividend growth
Santam’s capital position remains robust.
The group reported an economic capital coverage ratio of 169%, above its target range of 145% to 165%.
Reflecting this strength, the board declared a final dividend of 1 090 cents per share, bringing the total dividend for the year to 1 680 cents, an increase of 10.5%.
Outlook: cautious optimism for 2026
Santam expressed cautious optimism about the operating environment, although several external risks remain.
The group noted that the International Monetary Fund expects South Africa’s economic growth to improve slightly in 2026, with GDP projected to rise to 1.4%, up from 1.3% in 2025.
Santam warned that volatile weather patterns remain a major risk to underwriting results. Investment returns may also moderate after strong market performance in 2025 and remain sensitive to global geopolitical developments.
Santam said it will continue focusing on disciplined underwriting, international expansion and new distribution opportunities under its FutureFit 2030 strategy.
“As a group, we remain confident in our prospects and our potential to deliver enhanced growth and profitability,” Madzinga said.
