Santam said on Tuesday that it expected its headline earnings per share (HEPS) for the year ended in December to be between 39 to 44% lower than those reported for the comparative period in 2015.
The short-term insurer said the decrease in HEPS was driven by a normalisation of the net underwriting results, compared to the exceptional performance of 2015, as well as significantly lower investment returns, mainly due to the strengthening of the rand in 2016.
The underwriting results were negatively impacted by a few large corporate property claims and a decline in crop business profits from their high levels of 2015, driven by drought-related claims during the first half of 2016.
Several catastrophe events impacted Santam’s 2016 results, mitigated by reinsurance recoveries.
Santam’s South African investment portfolio performed well compared to the market. Foreign currency exchange losses however had a significant negative impact on investment returns.
Santam will release its audited results for the year in March.
– African News Agency