Santam Reports Jump in Full Year Profits

March 2 - Fewer accidents overall and a recovery in its underwriting business saw one of South Africa's largest insurance groups, Santam post impressive profits this week.

Santam, which is owned by life insurance group Sanlam, reported a 51% growth in full year profit.

At the time of issuing the report, Santam said that it expected its underwriting margins to decline as well.

The results didn't come as a huge surprise to the insurance industry, since last month Santam announced that it expected its headline EPS to rise by up to 55%.

One of the reasons why Santam could report such good profits was that there were fewer large industrial accidents and fires that the previous year.

Net insurance premium revenue rose R13.5 billion, compared with R12.9 billion in 2009.

The full year profits reported by Santam are yet another sign that South African insurance groups are emerging from the 2009 recession that hit consumers so hard.

Many South Africans lapsed on payments or simply cancelled their insurance policies altogether as they struggled with unemployment, ballooning prices and financial problems.

According to Santam's estimates, underwriting margins are expected to decline to between 4 and 6% this year.