South African insurer Santam reported a resilient 8.1% underwriting margin in the first half of 2026, down from 11.3% a year earlier, as weather-related losses totaling R1.5 billion weighed on results.
Net income increased 7% to R2.19 billion, while gross written premiums grew 10% to R23.1 billion. The interim dividend rose 10.2% to 650 cents per share, marking 35 consecutive years of payouts. Return on capital fell to 27% from 33.2%, though it remained above the 24% target.
Weather losses surged to R1.5 billion from R144 million in the prior period, exceeding the 10-year average of R1.4 billion. The insurer attributed the increase to severe weather events, partially offset by geocoding technology that delivered approximately R200 million in savings by improving catastrophe claim assessments.
Conventional insurance profit before tax rose 11% to R2.81 billion, while the net insurance result declined 17% to R2.08 billion. The claims ratio increased to 58.4% from 56.0%, and the acquisition cost ratio edged up to 33.5% from 32.7%.
Direct business accounted for 23% of gross written premiums, up from 22%, while international operations reached 23%, both tracking toward Santam’s 2030 target of over 30%. The economic capital coverage ratio stood at 167% as of June 30, near the top of the 145% to 165% target band.
Property catastrophe reinsurance pricing fell 25% by April 2026, easing pressure on underwriting costs. However, macroeconomic headwinds persisted, with South African diesel inflation at 50.8% and petrol at 31.7% year-over-year in June 2026, while headline inflation reaccelerated to around 7%.
