AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Santam Limited (Santam) (South Africa). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Santam’s consolidated balance sheet strength, which AM Best assesses as strong, as well as the company’s strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect, in the form of lift, Santam’s strategic importance to its ultimate parent company, Sanlam Limited.

Santam’s balance sheet strength is underpinned by its consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), good financial flexibility, and its long track record of strong organic capital generation. Despite Santam's conservative investment portfolio by asset class, AM Best considers the quality of Santam’s assets to be an offsetting factor in the balance sheet strength assessment given its concentration in domestic securities.

Santam has a track record of strong operating performance through the business cycle. For year-end 2023, the company reported a profit after tax of ZAR 3.4 billion (USD 185 million), equivalent to a return-on-equity ratio of 29.5% (as calculated by AM Best). Despite high competition in its domestic market and several material natural catastrophe losses in recent years, Santam has maintained robust underwriting performance driven by a disciplined underwriting approach, a diversified product offering, and preferential access to profitable business from affiliated entities across Africa.

Santam’s business is focused on its core market in South Africa, where it holds a well-established and dominant position. The company’s geographical concentration in South Africa is partially mitigated by its good diversification by line of business.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

AM Best does not maintain a regulatory registration in South Africa. All rating activity has been conducted on an offshore / remote basis.

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