As growth in SA slows, Santam looks to new markets
Santam, a short-term insurer, intends to concentrate on growing its business in the rest of Africa and Southeast Asia, as low GDP growth in its home market of South Africa translates into minimal growth in insurable assets.
For the 12 months to December 2015, Santam grew gross written premiums (GWP) by 7% to R24.3 billion, less than the 12% seen in the previous period. Furthermore, the group recorded an underwriting margin (premiums collected less claims-related expenses) of 9.6%, an improvement on the 8.7% margin seen in the previous year.
Lizé Lambrechts (pictured), Santam CEO, noted that because the insurance industry in which Santam operates is directly linked to GDP growth, this would be a difficult year for the company and it would have to work hard to find profitable business.
In November last year, Sanlam and Santam announced that they would acquire a 30% stake in Morocco-based Saham Finances, the insurance arm of the Saham Group and which has operations in 26 countries across Africa and the Middle East, in a deal worth $375 million.
According to Lambrechts, a key focus for this year is thus to bed down the Saham transaction and ensure that Santam sees good organic growth from its existing investments outside of South Africa.