South Africa - Santam earnings hit by crop losses, fires and floods

05.03.2020 175 views
South Africa’s largest short-term insurer Santam has reported solid operational results for 2019, recording a 7% Gross Written Premium (GWP) growth and 7.7% underwriting margin (2018: 9.2%) for the conventional insurance business. However, headline earnings per share decreased by 1% to 2069 cents. Lizé Lambrechts, the Santam Group CEO, said the group is satisfied with its performance, particularly in the face of the strained South African economy, which challenged growth in premiums over the year. “Our underwriting margin is at the high-end of our target range of 4% to 8%. Going forward the group will continue focusing on growth, disciplined underwriting actions and managing the risk associated with poor economic conditions,” she said. Fires, floods, and drought devastated various parts of the country during 2019, with Gauteng, KwaZulu-Natal and the Northern Cape taking a particular toll. Santam paid more than R800 million in Agri related claims during the period under review, it said. “We’ve seen time and again the impact disasters have on the country’s most vulnerable communities. Therefore, we are continuing to focus on entrenching resilience through sustainable partnerships,” Lambrechts said. Cash generated from operations increased to R5.8 billion (2018: R5.5 billion), due to better investment returns realized. Headline earnings amounted to 2069 cps, down by 1% from 2099 cps in 2018. A 22.2% return on capital was attained. The economic capital coverage ratio was 160% – at the midpoint of the target range of 150% to 170%. The board declared a final dividend of 718 cents per share (2018: 665 cps). Performance Following a difficult start to 2019, with a number of catastrophe events (impact of R334 million compared to R114 million in 2018) and significant insurance crop losses, the business experienced a subdued claims environment for the remainder of the year, resulting in strong underwriting performance. The Santam Commercial and Personal intermediated business reported excellent underwriting results, although lower than its exceptional 2018 results. The business benefitted from the new underwriting, administration, and product platform as well as disciplined underwriting actions. The motor class reported strong underwriting performance in the intermediated and direct distribution channels. The MiWay underwriting results were not significantly impacted by the catastrophe events during the period, resulting in an improved loss ratio of 54.2% (2018: 55.2%) and an underwriting profit of R393 million (2018: R334 million). The property class reported an underwriting result of R212 million, compared to the R519 million reported in 2018, negatively impacted by catastrophe events in South Africa and in Asia. The Specialist business benefited from the strong underwriting results achieved by the property and engineering classes of business. The liability results improved significantly from the 2018 position, which was negatively impacted by the product recall claims relating to the listeriosis outbreak. The Specialist business results were negatively impacted by the continued underwriting losses reported by the Trade Credit Business that is in run-off since August 2019. The crop insurance class was negatively impacted by significant hail and frost-related claims resulting in a net underwriting loss of R87 million (2018: net underwriting profit of R54 million). The Alternative Risk Transfer (ART) business reported excellent operating results of R171 million (2018: R96 million). Centriq and Santam Structured Insurance benefited from increased fee income and improved investment margins. Strong growth was achieved in the risk finance and alternative distribution businesses.
  • The group reported a 9% growth in the property class on the back of strong growth in the specialist property business, following lower reinsurance capacity in the market.
  • Crop insurance saw 22% growth in gross written premiums, supported by a change in the mix of farming crop types that increased insured values in South Africa, as well as reinsurance partner business.
  • The motor class grew by 4%, with MiWay reporting 10% growth (gross written premium of R2.8 billion; 2018: R2.5 billion).
  • The commercial motor intermediated business had strained growth as a result of difficult market conditions.
  • Conventional insurance saw a satisfactory growth of 7%, it said.
  • Gross written premiums from outside South Africa written on the Santam Ltd and Santam Namibia Ltd licenses amounted to R3.9 billion (2018: R3.4 billion), equating to 15% growth.
  • This was propelled by strong growth in the corporate property and engineering businesses in Africa, as well as in Santam Re in Southeast Asia, India, and the Middle East.
  • Several large construction projects outside South Africa benefitted the engineering class, which grew strongly by 20%. The liability class had a growth of 5% (2018: 2%), with a focus on improved profitability in a competitive climate.
Net investment income attributable to shareholders, inclusive of investment return on insurance funds of R1 396 million (2018: R1 105 million) was reported. The improved performance was a result of fair value gains on financial assets and increased interest income. While 2018 saw a positive movement of R376 million in foreign exchange differences, negligible gains were seen in 2019. Outlook Santam said it has embarked on a new strategy for the next five years, where it will be focused on harnessing technology to drive innovation and efficiency, and improve its human capital capabilities. It will also expand its international business and growing its specialist business, the group said. “The investment market is likely to remain uncertain. The lower interest rate environment will negatively impact investment performance, while the non-rand-denominated investments increase foreign exchange volatility for the group. Santam will continue to assess the risk and implement appropriate responses, guided by our risk appetite,” Lambrechts said. Source - https://businesstech.co.za
27.03.2024

Turkey - Climate change may affect grape cultivation

A recent study has highlighted the impact of the climate crisis on viticulture in Turkey, predicting that the expected rise in temperatures and reduced rainfall could shift the suitability of vineyard regions for grape production over the next three decades.

27.03.2024

Crop crisis reveals El Niño’s toll on Southern Africa

New findings from the El Niño-Southern Oscillation (Enso) reference group highlight the significant impact of the 2023/24 El Niño event on various aspects of climate and agriculture in Southern Africa.

27.03.2024

Philippines - Crop losses reach P80M as drought hits Negros Oriental

As the El Niño phenomenon worsens in Negros Oriental, damage to rice, corn, and other high-value crops has reached more than PHP80.4 million, the Department of Agriculture-Provincial Agriculture Technology Coordinating Office (DA-PATCO) said Tuesday.

27.03.2024

USA - Farmers say coverage has become unavailable or unaffordable as drought and floods increasingly threaten their crops

Farmers who grow fresh fruits and vegetables are often finding crop insurance prohibitively expensive — or even unavailable — as climate change escalates the likelihood of drought and floods capable of decimating harvests.

27.03.2024

India - Telangana Minister assures financial support for rain-affected farmers

Telangana Excise and Prohibition Minister Jupally Krishna Rao has assured the farmers that the government is committed to providing financial help to the cultivators whose crops were damaged due to unseasonal rains.

27.03.2024

Australia - Managing canola pests using beneficial insects, spiders and mites

Australian grain growers will benefit from improved pest management strategies with the commencement of two new research projects focusing on beneficial insects (beneficials) in canola.

27.03.2024

USA - Early blooms indicate strong fruit year if frost, freeze can be avoided

Warm temperatures in late February and early March have led fruit trees across Virginia to blossom early. Based on what growers are seeing, the number of blooms indicate at banner crop. However, there is a risk a portion of that crop could be wiped out by a freeze or frost.

27.03.2024

USA - As winters warm, Wisconsin fruit growers brace for the worst

On a cool, early spring morning in March, Liz Griffith stands among her apple trees, reaching to the very highest branches with a pole saw. Birds that have already returned north call to each other over the “snip snip” of shears, as Griffith and her staff prune through eight acres of apple trees on her orchard in Cottage Grove.

istanbul escort şişli escort tbilisi escort şişli escort şişli escort maslak escort istanbul escort beşiktaş escort taksim escort izmir escort ümraniye escort mecidiyeköy escort şişli escort taksim escort ümraniye escort kartal escort şirinevler escort maltepe escort istanbul escort ümraniye escort kadıköy escort vip escort mersin escort istanbul escorts ataköy escort avcılar escort beylikdüzü escort okmeydanı escort şişli escort tuzla escort işitme cihazı sex shop sex shop sex shop sex shop sex shop sex shop sex shop sex shop