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Claims set to damage Santam's margins

January 22 2013 at 08:00am
By Bloomberg

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Santam’s stock declined for a third day yesterday after Fitch Ratings said local insurers might struggle to maintain profits and as heavy rains added to potential claims.

The property and casualty insurer fell as much as 6.4 percent in early trade, before closing 2.64 percent lower at R181 on the JSE.

South African insurers “may struggle to maintain the same level of profitability” in a tougher operating environment, Fitch said last week.

Tourists had been evacuated and camps closed at the Kruger National Park following heavy rains this weekend, SANParks said yesterday.

Santam’s net underwriting margin was below its medium-term target range of 5 percent to 7 percent after “adverse weather conditions” in the Eastern Cape and Gauteng and “extensive fires” in St Francis Bay in the Eastern Cape, it said last month.

“I’m expecting a lot of claims to come through. I don’t expect these next results for 2012 to be very good,” Avior Research analyst Byran Taljaard said yesterday. - Bloomberg


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