Santam FY24 HEPS jumps 51%

Short term insurance group Santam has announced a remarkable 51 per cent surge in profit for the full year ending in December. The company's gross written premiums also saw a substantial 11 per cent increase, reaching R41 billion, while the underwriting margin stood at a solid 7.6 per cent. Gugu Mtetwa, the Chief Operating Officer of Santam, joined CNBC Africa to delve deeper into the factors driving this impressive performance and discuss the challenges faced by the insurance industry in the current economic landscape. Mtetwa credited the company's robust growth to the successful implementation of their strategic initiatives. In 2023, Santam launched the 'future fit' strategy, focusing on maintaining dominance in the broker business while expanding into the direct business through a multi-channel approach. This strategy has paid off, with noticeable growth in the MyWay and Santam Direct sectors, as well as fruitful partnerships with entities like MultiChoice. Additionally, Santam's specialist and reinsurance businesses have shown promising growth on an international scale. Despite facing challenges such as weather-related claims amounting to 748 million, Santam's emphasis on risk selection, geocoding, and collaboration with municipalities has enabled them to navigate these hurdles successfully. Mtetwa highlighted the importance of educating consumers on the value of insurance beyond just claims, emphasizing asset and wealth protection as key benefits. Addressing recent catastrophic events, Mtetwa expressed condolences for those affected by the severe floods in KwaZulu-Natal and other regions. Santam is currently assessing the impact of these disasters and working closely with communities and local authorities to mitigate risks and provide support. In a discussion about consumer behavior amidst the challenging economic environment, Mtetwa acknowledged varying attitudes towards insurance purchases. With the launch of tailored products like the Smart SMME insurance for small businesses and partnerships with companies like MTN to cover cell phones, Santam aims to cater to diverse consumer needs. The company continues to focus on cost optimization and engaging stakeholders across the value chain to manage premiums and provide affordable insurance solutions. Mtetwa also addressed concerns regarding product inflation and insurance costs, assuring that Santam is committed to managing input costs and controlling claims inflation to offer competitive pricing. She encouraged individuals to explore the range of products Santam offers and explore customized pricing options that best suit their needs. As Santam continues to navigate the evolving landscape of the insurance industry, Mtetwa's insights shed light on the company's strategic growth trajectory and resilience in the face of challenges.