Santam, South Africa’s short-term insurer, announced today that the momentum in new business generated through the MTN partnership in Santam Partner Solutions remains robust.
Seven months ago, Santam forged an alliance with MTN South Africa, acquiring the mobile telecommunication company’s device insurance portfolio.
The latest market update from Santam reveals that the partnership has successfully sold nearly 100,000 new policies to date.
“The transfer of the in-force book of MTN device insurance is still subject to regulatory approval, which is expected towards the end of the year,” said Santam.
MTN South Africa’s device insurance book currently has just over 400 000 policies and an annual Gross Written Premium value of nearly R400 million.
The acquisition, and alliance, is aimed to support MTN South Africa in broadening the reach of device protection to their clients, in line with the importance of devices in the lives of customers.
The agreement follows on the heels of the announcement in November 2022 of a strategic alliance to market insurance and investment products across Africa between Sanlam and MTN Group, the holding companies of Santam and MTN South Africa, respectively.
Today, Santam announced its operational performance for the nine months ended 30 September 2023.
Conventional Insurance business
The Conventional Insurance business achieved net earned premium growth of 7%, with strong contributions from all businesses apart from Santam Re. Santam Re’s net earned premium continues to lag the comparative period in 2022, following the profitability and risk management actions that resulted in the cancellation of non-profitable business.
Gross written premium grew by 4% with a key focus on profitable growth and portfolio pruning.
Santam Re Agri and Emerald were detracting from growth on a gross basis.
The Agri business declined from a high base in 2022 due to the seasonality of the crop business; the majority of the premium flow is realised in the 4th quarter.
Emerald elected not to renew poorly priced business in the third quarter of 2023. Emerald significantly reinsured these policies, with a consequential limited impact on net earned premium growth. All other major businesses achieved solid growth.
The Santam Client Solutions and Broker Solutions businesses achieved good growth in gross written premium and net earned premium. The premium-related corrective actions taken in response to high claims inflation and frequency continue to be realised.
Churn rates increased as a result of these actions, but remained within expected levels.
MiWay experienced improved gross written premium growth since the end of June 2023, with a pleasing turnaround in its traditional outbound model to positive growth in policy count.
Business insurance and value-added services continued to show strong growth. Good progress is being made with the roll-out of MiWay’s new inbound and tied business agent strategic growth initiatives.
Conventional Insurance underwriting results remained under pressure since the end of June 2023, with some R200 million net claims incurred regarding the Western Cape flooding in September. Broker Solutions, Client Solutions and MiWay were affected by these claims.
In addition, further large net claims of some R100 million were lodged at Broker Solutions in the three months ending 30 September 2023.
The Specialist Solutions business, however, maintained a strong underwriting performance. The significant losses remained below the reinsurance retention threshold.