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SNT
SNT
STN - Santam - Operational Update To Shareholders Following Its Annual
General Meeting 28 May 2008
SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT & ISIN: ZAE000093779)
Annual General Meeting - Operational update to shareholders
This serves as a general communication to Santam shareholders with regards to
the business environment for the year to date.
In line with the position at the end of 2007, industry conditions remain
challenging with pressure on premium rates. Whilst the underwriting performance
of the personal and commercial business lines met expectations, the industry was
plagued by an unusual number of very large industrial claims which adversely
affected the company`s underwriting margin in the corporate business unit.
However, the current reinsurance programme has provided balance sheet protection
regarding these claims. Apart from the corporate business unit, Santam`s overall
growth and underwriting profit in South Africa has been satisfactory with
improvements being achieved by both portfolio management and Santam Agri which
underperformed in 2007.
The performance of the investment portfolio has been under pressure during the
period. Although the higher interest rates had a positive impact on cash related
investments, the equity portfolio performed below expectations. The company`s
equity portfolio is value biased and hence currently overweight in financial and
industrial shares whilst underweight in resource shares.
Headline earnings are below expectations primarily due to the investment
returns. Should this trend continue for the balance of the first half of 2008,
headline earnings will be substantially below equivalent levels of 2007.
Actions to disinvest from the European insurance operations are well under way.
The ongoing operations of the London based company were sold as a going concern
with effect 1 January 2008. The reserve requirements of both companies are
closely managed whilst in run-off. We are looking to dispose of these run-off
positions when opportune.
Shareholders are reminded of the inherent volatility of underwriting and
investment activities.
The next set of results will be the interim results for 2008 to be published on
27 August 2008
CAPE TOWN
28 MAY 2008
Sponsor:
Investec Bank Limited
Date: 28/05/2008 17:18:57 Produced by the JSE SENS Department.
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