Our opinion on the current state of SNT

Santam (SNT) is South Africa's largest short-term insurer with about 22% of the market. This means that it does not engage in endowment insurance, annuities or any kind of investment insurance. It insures assets, like buildings and vehicles and individuals against risks which they cannot afford such as the loss of their income through disability or death. Santam pays the first R150m of any claim and then relies on its re-insurance policy. The company has level 1 BEE status and employs more than 6000 people. Following the Ma-Afrika judgement, Santam has increased its provision for contingent business interruption (CBI) by R1,7bn. Santam rates as one of the JSE's most reliable quality shares. The company was obviously impacted by the civil unrest in July 2021. In its results for the six months to 30th June 2023 the company reported gross written premiums up 7% and return on shareholders’ funds of 24%. Headline earnings per share (HEPS) were 1170c compared with 475c in the previous period. The company said, "Insurance growth prospects were dampened by persistent weak economic growth and pressure on personal disposable income in South Africa from high consumer inflation levels and rising interest rates. Adverse weather conditions drove high claims frequency in the first quarter of 2023, followed by widespread catastrophe flooding in the Western Cape province in June". In an operational update for the 9 months to 30th September 2023 the company reported premium growth of 7% in conventional insurance with gross written premiums up by 4%. The company said, "New business written through the MTN partnership in Santam Partner Solutions continued to gain traction, with almost 100 000 new policies sold to date". The share trades on a P:E of 11,58. It is probably the best example of a blue-chip share, with a strong balance sheet and a history of steadily improving earnings year after year for many years. These facts can be seen in the steady upward trend of its share price over the past 37 years. In 1985 the share traded for 90c and today it trades for around R278. This share should be a part of any private investor's portfolio.