Insurer Santam has reported a strong first quarter, with double-digit growth in gross written premiums.
The group said on Tuesday that it exceeded the longer-term targets for all key financial performance indicators in the quarter to end-March.
“Particularly pleasing were double-digit growth in gross written premiums, an underwriting margin above the upper end of the 5%-10% target range and annualised return on capital in excess of 30%,” it said.
The conventional insurance business achieved gross written premium growth of 11%, with solid contributions from all businesses. Highlights included double-digit growth at MiWay, a combination of excellent growth in business insurance and continued acceleration in personal lines new business.
Santam Re also achieved strong double-digit growth, supported by whole-account quota share business from strategic partnerships.
The underwriting performance for the period benefited from the various actions implemented over the past two years, which improved the underlying rating strength and profitability of the in-force book.
Favourable interest-rate market returns and an outperformance of benchmarks by the group’s investment managers supported investment return earned on insurance funds, which amounted to 2.5% of net earned premium, slightly exceeding the comparable period, it said.
Santam said global political tension enhanced the risk of supply chain disruptions, which, together with a weaker rand exchange rate, could contribute to higher claims inflation and a commensurate negative effect on underwriting results.
Under these conditions, general inflation is likely to accelerate in SA, eroding consumer disposable income and growth conditions.
“We monitor conditions as they unfold but take proactive measures to mitigate against the potential headwinds. These include increased focus on diligent expense management and accelerating strategic growth initiatives through our direct and partnership channels in SA and our international growth pillar,” it said.
“The strength of our client and intermediary relationships and a superior distribution footprint positions us well to maintain a solid financial performance as we head into an uncertain operational environment. Profitable growth remains a key focus area for all businesses,” it said.
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