Arguably the best of them all

The property book swung from a R165m loss to a R519m surplus. The motor book’s surplus rose 37% to R1.18bn

Much of the insurance game is about luck, for both the insurer and the client.

Many customers of market leader Santam — which has about a 22% market share — would have insured for 2017’s catastrophes such as the Knysna fire and widespread hailstorms in Gauteng. The key measure for short-term insurers is the underwriting ratio, or the surplus left over once claims and expenses have been paid. For Santam this increased from 6% in 2017 to 9.2% in the year to December 2018.

Insurers can reduce the volatility of returns through reinsurance, which Santam has maintained at about 18.5% of premiums, mainly for catastrophe cover.

Santam CEO Lizé Lambrechts says: “We also helped our returns … by helping our clients manage their commercial fire risks, and by cancelling cover in the most risky cases.”

She says that there is still a sizeable risk protection gap; it is estimated that only a third of the cars on SA’S roads are insured.

Yet gross written premium was up a modest but satisfactory 7%, to R27.7bn.

Even the wholly owned direct motor insurer Miway was in line, with 7.6%; this is still a couple of percentage points ahead of arch-rival Outsurance.

“The direct insurers have more or less played out,” says Jan Meintjes, portfolio manager at Denker Capital. “Miway and Outsurance are both [now] much more mature.”