Santam (SNT) Q1 2025 TU earnings summary

Executive summary

• Delivered strong performance for Q1 2025, exceeding long-term targets for all key financial indicators.

• Achieved double-digit gross written premium growth and an underwriting margin above the 5%-10% target range.

• Annualised return on capital exceeded 30% despite challenging South African economic conditions and global geopolitical tensions.

• FutureFit 2030 strategy and diversification supported operational resilience and value creation.

Financial highlights

• Gross written premium growth of 11% in conventional insurance, with strong contributions across all businesses.

• Net earned premium growth of 17%, outpacing gross premium growth due to timing differences.

• Underwriting margin exceeded the 5%-10% target range, a substantial improvement year-over-year.

• Investment return on insurance funds reached 2.5% of net earned premium, slightly above the prior year.

• Shareholder investment returns were below expectations due to foreign currency translation losses from Rand strengthening.

Outlook and guidance

• Global geopolitical and economic risks have increased, with higher import tariffs and market volatility.

• Balance sheet remains resilient, but higher claims inflation and negative underwriting impacts are possible due to supply chain disruptions and a weaker Rand.

• Focus on expense management and strategic growth, including leveraging the MultiChoice transaction for customer base expansion.

• Underwriting performance for the rest of the year remains susceptible to adverse weather and significant loss events.

• Investment market volatility expected to persist, potentially impacting returns and earnings growth.