Santam Limited

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Santam Limited (2021-12)
  • Santam Limited
  • Year : Dec 2021
3 Tokens
USD 300.00

The Santam group maintained solvency levels of slightly above 160% at both FY20 and 1H F21 under the Economic Internal Model (“EIM”), against a 150% to 170% internal target range. Capital was largely supported by positive internal capital generation and the retention of full profits, while insurance exposures and market charges (reduced by the impairment of the Saham investment and lower equity prices) were well contained. Although solvency is supported by subordinated debt, qualifying as Tier II capital (24% of equity at 1H F21), the impact on capital quality is somewhat balanced by our positive view on financial flexibility.

Additional Information

The ratings derive upliftment from implied parental support, given relevance to Sanlam Limited group’s strategy, history of performance, and contribution towards earnings diversification. The negative one notch spread on the national scale long-term issuer credit rating reflects the regulatory subordination of senior unsecured creditors to policyholders. A further negative two notch spread on the notes reflects the subordinated status and mandatory deferability of the notes (if there is a Regulatory Deficiency Redemption or Interest Deferral Event).

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