Santam (SNT) H2 2024 earnings summary

Executive summary

• Demonstrated operational resilience and improved performance in 2024, overcoming significant headwinds such as extreme weather and challenging macroeconomic conditions.

• Underwriting margin for conventional insurance rose to 7.6%, a significant turnaround from 2023 and within the 5%-10% target range.

• Net income increased by 13% year-over-year, reaching R3,679 million, with a return on capital of 31.9%.

• Strategic focus on multi-channel distribution, international expansion, and partnerships such as MTN and MultiChoice to access new customer segments and drive growth.

• Property portfolio returned to profitability after prior losses, supported by underwriting and risk management actions.

Financial highlights

• Gross written premium (GWP) grew by 10.5%, exceeding the target range, with net earned premium up 9.7%.

• Underwriting margin more than doubled from 3.5% to 7.6% year-over-year.

• Final dividend declared at ZAR 9.85 per share (985 cps), up 8.8%; total ordinary dividends for 2024 up 8.6% to 1,520 cps.

• Return on capital at 32%, with two-thirds from insurance activities.

• Alternative Risk Transfer earnings rose to ZAR 781 million, up over 50%.

Outlook and guidance

• Continued focus on profitable growth, with further improvement expected in underwriting margin in 2025, barring extreme weather events.

• Property portfolio profitability and risk management remain key priorities.

• Emphasis on scaling direct channels, international business, and diversification.

• Long-term targets include GWP growth at CPI+GDP+1-2%, return on capital above 24%, and international GWP above 20% by 2030.