Santam said yesterday that the three months to March 31 had brought an adverse claims experience, particularly from bad weather and power surge claims impacting the property class of business.
The short-term insurer, a leader in the local market, said in an operational update that operating conditions were challenging, with insurance growth prospects dampened by the impact of electricity supply disruptions on economic growth and pressure on personal disposable income from higher inflation and interest rates. The insurance market was also competitive.
“The group showed operational resilience and achieved sound financial results for the period. The corrective underwriting actions have had a positive effect, with further benefits expected in the coming months. The underwriting performance of the motor class showed significant improvement compared to the comparative period in 2022,” the group said.
Overall, the net underwriting margin for the three months was below the bottom end of the 5% to 10% target range.
Underwriting actions in 2022 and 2023, which include procurement efficiencies, segmented premium increases, and higher claim excesses, were showing positive results, but would only be in full effect at the end of the renewal cycle for all policies during the latter part of 2023.
Additional underwriting actions to address the increase in power surge claims would become effective on June 1.
The Conventional Insurance business achieved gross written premium growth of 6%. The Santam Client Solutions and Broker Solutions businesses saw good growth in gross written premiums.
The Santam Specialist Solutions business recorded strong growth in gross written premiums, with liability, marine, aviation and travel being the main contributors.
MiWay experienced subdued gross written premium growth in the context of pressure on consumers and a competitive market. Good progress was being made with the roll-out of MiWay’s growth initiatives.
Santam Re reported steady gross written premium growth following a general increase in reinsurance rates globally.
BUSINESS REPORT