Johannesburg - South African property and casualty insurer Santam posted a 13 percent drop in first-half earnings on Wednesday after weather-related claims put pressure on its underwriting business.
Santam, which is majority owned by insurer Sanlam, posted diluted headline earnings of 363 cents per share in the six months to end June, from 415 cents a year earlier.
Headline EPS, the benchmark profit measure in South Africa, excludes certain one-time items.
South African insurers have been struggling to grow premium income in the face of increased competition.
Santam, South Africa's largest property and casualty insurer, said its underwriting margin contracted to 1.3 percent from 6.1 percent in the same period a year ago.
Net insurance premium income came in at 297 million rand ($28.5 million), down from 677 million in the previous year.
Santam said in May it suffered significant underwriting losses in crop insurance after hail damage to summer crops and drought claims. It also experienced elevated claims following floods in January and fires.
Santam, which also has interests in six other African economies including Uganda and Tanzania, said investment income fared better and grew 8 percent to 363 million rand.
The insurer had sold off 0.5 billion rand worth of equities to reduce exposure.
The domestic equity market has scaled a series of lifetime records this year and has added about 10 percent so far.
The company's shares took a knock after the earnings dropping nearly 4 percent, compared with a 1.3 percent decline by the All Share index. - Reuters