Top South African insurer bets R2.2 billion on the UK

Santam has begun underwriting insurance in the United Kingdom after it received final approval from Lloyd’s of London to commence operations from 1 January 2026. 

This syndicate, known as Santam Syndicate 1918, will write business within the Lloyd’s of London market and is expected to boost the insurer’s international income. 

Santam gave some details about how the Syndicate will be reported, telling shareholders that a legal entity structure has been set up, which includes a South African-incorporated company, Santam UK Holdings. 

Santam UK Holdings, in turn, holds a newly incorporated company, Santam Corporate Member, a company registered in the UK, into which Santam Syndicate 1918 will be reported.

The insurer also revealed that it has provided R2.2 billion to the Syndicate as part of the ceding capital requirement from Lloyd’s. 

This amount was paid in the form of a long-term loan with no set repayment terms to the subsidiary, Santam UK Holdings. The funds have been invested in funds at Lloyd’s worth $118 million and a working capital loan to the Syndicate of $13 million. 

Santam outlined this, and its expectation that the UK business will begin contributing meaningfully to earnings in the current financial year, in its financial results for the 2025 year. 

The income from the UK operations will boost Santam’s offshore earnings, which currently come from its stake in Shriram General Insurance in India. 

This investment is beginning to bear fruit, with Santam’s share of the gross written premium of Shriram rising by 27% year-on-year. Net insurance results from the business rose by 28%. 

Despite this strong growth offshore, Santam’s business remains predominantly a South African affair, with its home marekt constributing 81% of gross written premiums. 

The company reported strong growth year-on-year with regard to insurance revenue, which rose by 7% to R56.1 billion on the back of strong premium growth. 

Crucially, this growth is highly profitable and sustainable, with Santam noting that it moderated growth in specialist lines of business where it was not prepared to follow unsustainable pricing from the market. 

As a result, Santam’s net underwriting margin exceeded the company’s target by 11.3%, translating into strong headline earnings per share growth of 8%. Profit surged by 16% to just over R5 billion. 

Santam’s return on capital also exceeded targets at 29.2% and enabled the company to declare a bumper dividend of R10.90 per share for the year. 

The insurer explained that it remains committed to executing its FutureFit 2030 strategy, which includes increasing its international diversification to above 20%. The success of the Lloyd’s Syndicate is crucial for this. 

Santam is also expected to increase its market share in the direct-to-consumer channel and in underpenetrated consumer segments. 

“Our focus remains on profitable long-term growth. International growth and diversification a key strategic pillars to transform the group’s future growth prospects and investment case,” Santam’s directors said.