SNT
SNT
SNT - Santam Limited - Board Meeting - Operational update to shareholders
SANTAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1918/001680/06)
(Share Code: SNT & ISIN: ZAE000093779)
Board 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.
Apart from the corporate business unit, Santam`s overall growth and underwriting
profit in South Africa have been satisfactory to date with commercial and
personal lines businesses meeting expectations. As mentioned with the
announcement of our 2008 interim financial results in August this year, industry
conditions remained challenging for the year with pressure on premium rates.
Whilst the company`s underwriting margin in the corporate business unit was
under severe pressure during the first half of the year due to an industry wide
experience of an unusual number of very large industrial claims, the company
experienced fewer claims during the second half to date.
As generally experienced by investors in the financial markets, the performance
of the company`s investment portfolio has been under severe pressure during the
period. It performed in line with the volatility and general decline on local
markets as the prolonged international financial, liquidity and economic crises
continue to impact negatively on developing markets in general. The company has
however taken actions to mitigate the downside. Although the higher interest
rates had a positive impact on cash related investments, this benefit could not
compensate for the equity portfolio`s performance. The group`s solvency margin
comfortably remains within the approved band of 35% to 45%.
Headline earnings are below expectations primarily due to the investment
returns. Should the weak equity markets continue for the remainder of the year,
headline earnings will be substantially below that of 2007.
Actions to disinvest from the European insurance operations are almost
completed. The Dublin based run-off operation was sold effective September 2008
when all the suspensive conditions were met. The London based company which is
equally in run-off was also sold, subject to final regulatory approval which is
expected early 2009.
Shareholders are reminded of the inherent volatility of underwriting and
investment activities.
The next set of results will be the audited abridged financial results for the
2008 financial year, to be published on 24 February 2009
CAPE TOWN
26 November 2008
Sponsor:
Investec Bank Limited
Date: 26/11/2008 14:00:05 Produced by the JSE SENS Department.
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