Santam sees five percent growth despite Covid-19 impact

CFO Hennie Nel says Santam’s growth demonstrated the value of a diversified business portfolio.

Santam has reported a growth of five percent despite the current economic and Covid-19 environment. CFO Hennie Nel says that the growth demonstrates the value of diversification.

“We are able to grow our business flows from outside South Africa by 28 percent through our specialist businesses and Santam RE,” he explains. “In South Africa, MiWay and our Agri businesses achieved excellent growth, while the intermediated commercial and personal business was under pressure.”

He adds that the growth in general insurance is directly linked to the growth in the economy and that the easing of lockdown restrictions should support business growth in South Africa. It will also result in a more normalised claims environment.

The group reported a drop in headline earnings of 47 percent for the year ended 31 December 2020 due to Covid-19.

Hennie says:

“Covid-19 related claims had a significant impact on the operating results. However, each business focused on optimising profitability and contributed to the overall performance.”

The group also reported having experienced gross insurance claims of just over R21 billion. “That’s the biggest amount we've paid up to date in a year for Santam,” he says. Of the claims Santam settled during 2020, R1 billion related to the relief payments made in August 2020 for contingent business-interruption claimants.

He adds that he is proud of the team effort from all the Santam businesses to adapt very quickly to the new way of working, and to deliver robust financial results.

Hennie explains that Santam’s key priorities for 2021 include effectively managing contingent business interruption claim payments and resolving outstanding legal matters, as well as continuing to balance profitable growth with an optimal underwriting margin and operating efficiency. “We will focus on enabling brokers, partnering with Sanlam to pursue growth opportunities, growing our pan-African specialist business with Saham, and investing in innovation and digital channels.”