SANTAM LIMITED - Operational update to shareholders following the Annual General Meeting held on 29 May 2019

Operational update to shareholders following the Annual General Meeting held on 29 May 2019

SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT & ISIN: ZAE000093779)
NSX share code: SNM
(‘Santam’)

OPERATIONAL UPDATE TO SHAREHOLDERS FOLLOWING THE ANNUAL GENERAL
MEETING HELD ON 29 MAY 2019

This is a general communication to Santam shareholders to inform them of the business
performance for the four-month period ended 30 April 2019.

Conventional insurance business

The first four months of 2019 were characterised by a number of significant catastrophe events,
including fires in the Betty’s Bay area in January, hail damage in Newcastle in March and the storm
and flood damage in Kwazulu-Natal during April. In addition, significant crop insurance losses were
experienced as a result of hail damage. These events resulted in the net underwriting margin for
the period being slightly below the bottom end of the target range of 4% to 8% of net earned
premiums. Acceptable growth in gross written premium was achieved. The investment return on
insurance funds was in line with the comparative period of the previous year.

The Santam Commercial and Personal intermediated business experienced a strain on growth in
the current difficult economic climate. The loss ratio increased significantly given the weather and
catastrophe related claims experienced during the period. The net underwriting results excluding
the multiple catastrophe events remained in line with expectations.

The Santam Specialist business experienced strong growth in the corporate property and
engineering businesses, with acceptable growth in the other specialist classes. The specialist
portfolio achieved satisfactory underwriting results with the exception of the marine business that
experienced a number of large claims and the trade credit business that incurred higher than
anticipated loss ratios. Significant hail-related losses impacted the crop business.

MiWay maintained its strong growth momentum from the second half of 2018. The catastrophe
events during the period had limited impact on MiWay and the loss ratio and underwriting margin
improved even further relative to 2018.

Santam Re reported below par gross written premium growth from third party business outside
South Africa, following underwriting action to improve the performance of the portfolio. Good
underwriting results were achieved.

Alternative risk transfer business (ART)

The ART business segment reported strong growth, specifically relating to the risk finance
businesses. Operating results were positively impacted by growth in net income from clients with
solid contributions from both Centriq and Santam Structured Insurance.

Sanlam Emerging Market (SEM) partner businesses

Saham Finances achieved strong growth in gross written premium with the year-to-date
performance exceeding business targets. For the general insurance business, the net underwriting
results were below expectations, due to market wide high motor claims experienced in Morocco,
fire claims in Ivory Coast and some exposure to the cyclone damage in Mozambique. This resulted
in a net underwriting margin for the period at the lower end of its 5% to 9% target range. The
claims experience in Morocco was in line with industry experience, with repricing and claims
management being the key areas of focus. The investment return on insurance funds improved in
some markets compared to 2018. Good progress was made in evaluating the optimal strategic
asset allocation of the insurance funds balances in Morocco and Ivory Coast.

Shriram General Insurance Company (SGI) recorded satisfactory growth and excellent net
insurance results, supported by a release of reserves relating to the third party motor liability book,
based on an improved run-off experience.

Investment performance

The group achieved improved investment income results, given the positive market value
adjustments on the investment portfolio and foreign currency gains during the period under review.

Headline earnings remain susceptible to the inherent volatility of underwriting and investment
activities.

The next set of Santam results will be for the six months to 30 June 2019, to be released on the
Stock Exchange News Service on 29 August 2019.


CAPE TOWN
29 MAY 2019
Sponsor: Investec Bank Limited

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