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Santam full-year earnings up 28%

Crop business hit by drought.

JOHANNESBURG – South African short-term insurer Santam’s full-year earnings beat expectations by rising 28% jump largely due to fewer claims, sending its shares seven percent higher.

Santam said diluted headline earnings per share rose to 1 844 cents in the year to end-December from 1 446 cents a year ago. Analysts polled by Reuters had predicted a 1.8% increase in earnings to 1 472 cents per share.

Headline EPS is the main profit measure used in South Africa and strips out certain one-off items.

South Africa’s largest property and casualty insurer raised its dividend by 10% to 528 cents, lower than the 842 cents analysts had anticipated.

Growth in the crop insurance business was, however, negatively impacted by the worst drought in decades in the maize growing belt, which saw underwriting profit falling R120 million ($7 million), it said.

The insurer added that slowing economic growth and expected interest rate hikes will further put pressure on consumers as they struggle to afford insurance cover.

By 1414 GMT, Santam shares we up 6.7% at R210.19.

($1 = R15.6792)

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