South African insurer Santam has reported a significant drop in its margins due to increased claims from adverse and severe weather conditions in the country.
The group reported slight revenue growth for the six months ended June 2026, but recorded a drop in its underwriting margin from 11.3% in 2025 to 8.1%.
The company attributed this to major losses from severe weather in Limpopo and the Western Cape.
Several provinces in the country have been hit by adverse weather, prompting the government to classify multiple states of disaster.
Provinces have been hit by strong, destructive winds and heavy flooding, doing billions of rands worth of damage to property and infrastructure.
Despite the severe weather and storms, Santam’s property insurance portfolio remained profitable.
The insurer increased its gross written premiums to R23 billion in the six months ended 30 June, up roughly 10% from R20.9 billion in 2025.
Its net earned premiums were R18.9 billion, up approximately R1 billion from 2025.
“It is particularly pleasing that the property class remained profitable despite the adverse claims experience,” Santam said.
Despite growing its book, the company’s underwritings took a hit, with profits from these core operations dropping year-on-year.
In 2025, the group recorded R1.8 billion in underwriting profit, which fell to R1.6 billion in the 2026 financial year.
The company’s international underwriting results were more concerning, reporting an underwriting loss of approximately R75 million.
While its core operations saw profitability decline, investment returns on insurance funds rose slightly.
The return was 2.9% in 2026, compared to 2.6% in 2025, which the company attributed to “solid
returns on local and global fixed-income investments, as well as outperformance of portfolio benchmarks.”
Santam’s alternative risk transfer business grew, increasing its profit contribution to the company by 12% to R466 million.
Santam’s basic earnings per share reached R20.06 in 2026, with diluted earnings per share reaching R19.91.
The company’s investment return on capital increased significantly year-on-year, reaching R727 million in the latest interim period.
Return on capital amounted to R35 million in 2025, marking a near 2,000% increase in earnings from this section.
Santam saw its book grow in its latest interim period, with international expansions into India and the UK adding to positive prospects for the future.
Santam was founded in 1918 and is currently one of South Africa’s largest insurance providers, focusing on short-term property and vehicle insurance.
The company is considered the largest short-term insurer in the country, with a market cap of roughly R47.8 billion.
In its latest interim period, the company’s conventional earnings reached R2.8 billion, slightly above the R2.5 billion made in the previous year.
A major driver of Santam’s increased profits for 2026 was its expansion into London through the launch of Syndicate 1918 and its new operations in India.
Syndicate 1918 is Santam’s expansion into the UK market, providing underwriting services within the Lloyd’s market.
In its interim results, the group said Syndicate 1918 concluded business with an estimated R1.3 billion in gross written premiums.
While these are strong results for the new operation, the deferral of premium income resulted in Syndicate 1918 recording an underwriting loss of R230 million for the interim period.
Santam also opened its GIFT City office in India, furthering its international expansion efforts into what the company believes is a promising market.
“India holds significant future growth prospects which we will now be able to better access due to the
improved tiering we obtained through the GIFT City presence,” the company said.
“These two initiatives have the potential to transform the group into a global multinational insurer with substantially enhanced growth prospects.”
Six months ended 30 June 2026
Six months ended 30 June 2025
Change %
Insurance revenue
R28 billionR27.5 billion+1.8%
Profit
R2.8 billionR2.5 billion+12.0%
HEPS
R20.06R18.73+7.1%
Cash generated from operations
R3.4 billionR4.1 billion-17.1%
Dividend
(cents)650590+10.2%
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