Deliver on the promise to clients in a way that creates value for all stakeholders

Achieve responsible, profitable and sustainable growth in South Africa and internationally

Ensure proactive sustainable risk management while promoting dialogue and collaboration on risk and resilience

Maintain high standards of operational efficiency, ultimately creating more robust and sustainable stakeholder outcomes

Influence and enable successful execution of the Santam strategy through engaged and competent people and partners

The business unit serves both retail and commercial markets by providing appropriate insurance solutions that suit the needs of entrepreneurs and businesses. For personal insurance, it offers a multiproduct and multichannel distribution portfolio covering eight classes of general insurance.

2018 has been a relatively benign year in terms of claims severity due partly to an absence of major catastrophe losses. The business unit performed well from an underwriting perspective, but growth in premium was tempered.

Tough economic conditions impacted small businesses, resulting in negative growth in the lower annual premium segment. On the other hand, a consistent approach to rating and underwriting over time and continued access to reinsurance markets benefited the higher value segments. Santam Commercial and Personal established a dedicated business unit to service and manage commercial business in this segment.

The business unit transferred a percentage of risk to medium to large commercial and corporate clients through more stringent requirements for smoke detection, sprinkler protection, pressurised water tanks and rational building design. A turnaround in the profitability of the property portfolio stemmed from an increase in new business rates in previously unprofitable property sections.

Outsourced business channels exceeded profit targets for the third consecutive year.

The investment in the use of big data and predictive analytics continued and forms the core of Santam Commercial and Personal’s pricing approach. The personal lines part of Santam’s move away from legacy systems to new software is almost complete. By the end of 2018, deployment was completed to all South African intermediaries in commercial lines and approximately 30% of all policies were migrated from legacy systems to the new system. The business unit plans to have the data migration process completed by the end of 2019.

The Santam Specialist business focuses on the insurance of large and complex risks in niche market segments in South Africa, rest of Africa and Asia. Products are client-driven and supported by specialist underwriting. This demonstrates an understanding of the unique risk environment.

Santam Specialist performed well in terms of overall growth, but underwriting performance was challenging. This is largely due to high claims activity in Stalker Hutchison Admiral (SHA) and strong competition from local and overseas markets.

Reduced property capacity and higher costs were positive for the property market, since rates hardened throughout 2018 with increased focus on risk management improving the long-term sustainability of our property book. Overcapacity in many specialist lines contributed to increased competition and lowered rates.

Outside of South Africa, emerging markets enjoyed strong growth and infrastructure development. However, changes in insurance legislation towards increased localisation of insurance premiums across Africa have put pressure on premium revenue into South Africa.

The weakening rand is positive for growth outside of South Africa, however, it can cause claims pressure in the aviation and travel sectors, where parts and medical claims are priced in US dollar. Similarly, while the increased oil price has a negative economic impact on our clients, it has a positive impact on oil-based economies in Africa such as Angola, creating growth opportunities.

The opportunity that Santam’s stake in Saham Finances presents in Africa is key to Santam Specialist’s growth strategy on the continent.

MiWay is a direct insurer that underwrites predominantly personal lines general insurance business through direct acquisition. This is supported by a smaller intermediated personal lines business and a suite of direct business insurance products.

MiWay’s gross written premium growth was under pressure, impacted by competitive market conditions and the poor economic climate, which resulted in a decrease in premium collections.

As a direct business, MiWay incurs all the cost of acquiring new business upfront, except for intermediary commission that is paid over the life of the policy. As a result, the increase in premium cancellations had a negative impact on MiWay’s acquisition cost ratio.

MiWay initiated the use of telematics technology to manage and mitigate the risk of theft and accidents. An emergency alert service was launched to all existing and new clients early in 2018. Telematics technology in the vehicle sends instant crash alerts to the MiHelp call centre, including severity estimates determined by artificial intelligence, allowing MiHelp agents to dispatch ambulance and assistance services to clients in distress without them having to call first.

The 24/7 MiHelp contact centre for roadside emergencies now allows clients to communicate via WhatsApp after the initial interaction, making the identification of incident locations, service provider dispatches and follow-ups more efficient and improving the overall client experience.

MiWay successfully refreshed its brand towards the end of 2018 and will continue to refine the process to unlock more efficiencies during 2019.

Santam re is a wholesale reinsurance service provider for the Sanlam Group general insurance businesses and independent general insurers in South Africa, Africa, the Middle East, India and Asia (including South-East South Korea). Santam re operates under the Santam general insurance licence, which enables it to optimise the size, quality and diversity of the overall risk pool relative to capital resources and risk appetite.

Santam re continues to contribute to the Santam group’s diversification strategy and its ability to create long-term value and remains an important vehicle for group reinsurance optimisation and services.

Santam re’s underwriting result deteriorated because of poor past run-off losses and a more conservative underwriting approach to reserving.

Strategically, the business unit focused on developing junior underwriters by exposing them to their markets through visits, conferences and engagements with clients. It also initiated projects to improve processes.

Santam re will continue to build partnerships with international reinsurers with portfolios of good standing to secure good new business flows from international partner cessions that cover the developed world geographies. This will provide further balance and diversity to the international portfolio.

Santam’s increased effective interest in Saham Finances is underpinned by the opportunity, in conjunction with SEM and Saham Finances, to use its expertise to play a leading role in expanding and managing the general insurance specialist portfolio in Africa and to become the leading Pan-African specialist insurance provider.

Saham Finance’s expertise in motor assistance, through Saham Assistance, presents significant business growth opportunities. Further synergies exist across several technology initiatives.