Santam Insurance released excellent FY24 results with a 50% increase in HEPS and an RoE of 32%, driven by a more-than-doubling of underwriting profit. The hard underwriting cycle for South African property and casualty companies has resulted in meaningful premium rate increases over recent years. Santam saw the benefits in 1H24 (when weather-related claims remained elevated) and even more so in FY24 (with a more benign 2H24 hail season and improved attritional losses). The share has re-rated on the back of the improved environment with a price-to-NAV ratio of 3.1x starting to move towards the 3.2x-3.7x range we were accustomed to prior to COVID-19. The company acknowledges an improved outlook and maintains its impressive long-term targets. See Edison Group's research below, produced in conjunction with Austin Lawrence Gidon.
4 March 2025
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