Large fire claims impact Santam’s conventional insurance division
SANTAM’S conventional insurance business achieved an underwriting margin at the lower end of its target range of 4-8 percent after some large fire claims in the four months to April 30, the group said in a operational update.
Gross written premium growth of 7 percent was satisfactory (4 percent excluding the premium relief support provided to policyholders in April last year), and was achieved in a difficult operating environment, the group said.
Santam started processing contingent business interruption (CBI) claims in January 2021, with steady progress made to date on claims where clients had submitted the required documentation.
A significant number of clients, who had notified Santam of claims, were yet to submit their final claim quantification documents, the group said.
Santam was one of the insurers that only started processing CBI claims following applications to the high court by claimants.
“Santam’s appeal against the Ma-Afrika judgment, with respect to the length of the indemnity period, is expected to be heard by the Supreme Court of Appeal in the second half of 2021,” the group said.
Given the number of CBI claims finalised during the period, no significant changes were made to the net CBI provision as at December 31 last year.
The Santam Commercial and Personal intermediated business reported low growth in gross written premiums, but growth initiatives started to show positive results.
The Santam Specialist business reported satisfactory growth in the liability and engineering businesses, but negative growth in the travel insurance, transport and corporate property businesses contributed to overall subdued growth in gross written premiums.
Underwriting results were negatively impacted by several large fire claims, partly offset by strong performances from the crop and liability businesses.
Mi Way maintained its positive growth momentum in a tough environment.
Santam Re continued to report good gross written premium growth. Shriram General Insurance (SGI) recorded negative growth in gross written premiums.
The business was impacted by weaker economic activity and lower sales volumes through the credit businesses, as well as no premium increases in 2020 on third-party business, as set by the regulator.
“Courts in India, where many claims resolutions happen, remain closed, which impacted the ability to finalise claims. SGI reserves prudently under these conditions, due to the uncertainty.”
During April, Santam increased its stake in Mirabilis Engineering Underwriting Managers by acquiring the remaining 45 percent shareholding for R176 million, making it a subsidiary.