JOHANNESBURG Feb 26 South African short-term
insurer Santam on Wednesday reported a surprise 4
percent increase in full-year earnings after booking a record
level of premiums, sending its shares higher.
South Africa's largest property and casualty insurer said
diluted headline earnings totalled 1,023 cents a share in the
year to end-December, from 984 cents a year earlier.
The profit growth was unexpected, as four analyst polled by
Reuters had expected earnings to fall by nearly 9 percent to 898
cents. Headline EPS, the main profit measure in South Africa,
excludes certain one-time items.
"Market conditions for general insurance are very tough,"
Chief Executive Ian Kirk told Reuters, citing weather conditions
and a weak exchange rate that drives up the cost of repairs for
The insurer, which is majority-owned by Sanlam,
said its gross written premiums - which refers to the amount
customers are required to pay for their insurance policies
during the period - rose 6 percent to a record 20.6 billion rand
Its net underwriting margin, a measure of its profitability
commonly used by insurers, was at 2.8 percent, lower than the 4
percent it posted in 2012.
The company targets an underwriting margin of 5-7 percent,
"We are not happy with the result, it's lower than what we
target in the medium to long term, in underwriting margin term,"
The insurer declared a final dividend of 433 cents per
share, from 230 cents a year ago.
Its shares were up 2.6 percent at 169 rand by 1345 GMT, but
have lost more than 10 percent so far this year. The All-Share
index was up 0.2 percent on the day.
($1 = 10.7258 South African rand)
(Reporting by Helen Nyambura-Mwaura; editing by David Dolan)