Santam delivered a strong first-half performance in 2025, surpassing its long-term targets.
Source: Supplied. Santam Group chief executive officer, Tavaziva Madzinga.
The group reported solid growth in premiums and earnings, with both underwriting margins and profitability showing marked improvement compared to the same period last year.
The Group’s underwriting margin also almost doubled from 6.5%, for the comparable period in 2024, to 11.3% in 2025 and was above the 5% to 10% target range. Also noteworthy is that annualised return on capital was 33.2% (June 2024: 33.6%), well in excess of the 24% target. MiWay, the direct insurance business, also saw its strategic initiatives gain traction, with the company recording 14% GWP growth and a 10.9% underwriting margin.
The strong performance belied the country’s lacklustre economic growth, coupled with no meaningful change in employment levels and increasing pressure on personal disposable income. Despite these challenges, South Africa remains the company’s key market with 80% contribution to the Santam Group’s GWP.
Tavaziva Madzinga, the Santam Group chief executive officer, said the company’s FutureFit 2030 strategy is on track and had created a solid foundation for facing a challenging operating environment in the first half of 2025.
“We remained resolute in executing our strategy, focused in South Africa on retaining our leading position in the broker distribution channel across personal, commercial and specialist lines of business, while growing market share in the direct channel and under-penetrated consumer segments through strategic partnerships,” said Madzinga.
“We also continued to roll out the remaining underwriting actions implemented in response to high claims inflation and frequency, aimed at fully restoring the underlying profitability and earnings momentum of the in-force book. This contributed to robust growth in GWP, as well as achieving a noticeable improvement in underwriting margins,” he added.
Headline earnings per share and earnings per share for the period increased by 18.7% to 1 873 cps (2024: 1 578 cps) and 19.5% to 1 873 cps (June 2024: 1 567 cps), respectively. GWP from the South African market, which accounts for 80% of all Santam’s business, increased by 6% to R16.6bn (June 2024: R15.7bn), while GWP from outside South Africa grew by 25% to R4.2bn (June 2024: R3.4bn).
The alternative risk transfer (ART) businesses achieved another sterling performance and grew their profit contribution by 28% to R417m (June 2024: R326m). The good showing was the combination of a 25% growth in operating earnings to R390m (June 2024: R312m) and an increase in investment return earned on capital to R27m (June 2024: R14m). Operating earnings were supported by good growth across most of the main income lines.
Solid premium gains
The Broker and Client Solutions businesses had moderated growth in premium rates after successfully addressing key areas of underperformance experienced since 2022, but still achieved solid growth in GWP. The Partner Solutions business also experienced strong growth, supported by robust device insurance sales at MTN and the first-time inclusion of policies from the recently concluded MultiChoice transaction.
MiWay’s growth accelerated, benefitting from the inbound and tied agency strategies launched in 2023, as well as the MiCashback value proposition launched in 2025. The Specialist Solutions business experienced a marginal overall decline in GWP, but Engineering and Construction and Agri achieved strong double-digit growth. Santam Re achieved excellent double-digit growth on the back of business written through strategic partnerships.
Improved risk profile
Both personal and commercial lines delivered solid underwriting margins, with all businesses exceeding the 2024 first-half performance. The risk profile and rating strength of the group’s in-force book improved over the last two years following underwriting actions implemented at Broker Solutions, Client Solutions and Santam Re.
The Specialist Solutions business maintained its track record of superior underwriting results, exceeding the comparable period performance by a sizeable margin. All insurance classes achieved strong underwriting results, with the turnaround in Property persisting in the first-half results of 2025.
Driving strategic growth
Santam expects economic growth conditions to remain susceptible to global geopolitical developments and does not anticipate this to improve markedly for the rest of the 2025 financial year.
The group, however, foresees an easing of pressure on personal disposable incomes and will, for the remainder of 2025 and into the 2026 financial period, focus on entrenching its leadership position in the intermediated insurance business area.
There will also be an increased focus on the higher growth areas in the direct distribution space, driving growth in new segments through partnerships as well as driving the international expansion strategy.
“As a group, we remain confident in our prospects and the potential to deliver enhanced growth and profitability, as our FutureFit 2030 strategy has been tailored to the environment in which we operate.
"We remain cautious, as volatile weather conditions remain a key insurance risk, which may result in volatility in underwriting margins. However, the underwriting actions we have implemented will position us well to manage these potential risks.
"The outlook for investment market returns is also directly linked to geopolitical developments, which remain uncertain. This may impact the investment return earned on insurance funds, the investment margin earned by the ART businesses and the net investment return earned on capital in the second half of 2025,” said Madzinga.
An interim dividend of 590 cents per ordinary share, which is an increase of 10.3% on the interim dividend of 535 cents declared in respect of the 2024 financial year, has been declared.
