South African Insurance Sector: Jun-26 Rainfall monitor

Research evidence excerpt

South African Insurance Sector: Jun-26 Rainfall monitor

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South African Insurance Sector Equities

South AfricaJun-26 Rainfall monitor

Insurance

Michael Christelis, FIA CFA

June 2026 monthly precipitation monitor Analyst

In this report, we detail our monthly tracker of rainfall data from UBS Evidence Lab for michael.christelis@ubs.com

major cities in South Africa and Australia (relevant to OUT). In South Africa, rainfall was +27-11-322 7320

relatively benign for the month and lower than the six-year average for H1. Gauteng

showed to be the exception for SA's normalised levels, with JHB and Pretoria recording

higher than average levels for June (JHB standing out with an all-time high since data

collection began in 2020). In Australia, rainfall was in line with the normal levels for

June, with Perth at an all-time low for the month since 2020. Adelaide stands out with

higher levels than usual for the month of June (highest June on record since 2020).

Insights ahead of reporting season: Expect somewhat weaker underwriting

After two benign weather years in SA, we are expecting a deterioration in attritional

losses in Q2 largely as a result of the Western Cape flooding in May. That said, our

expectations are that Santam (H1 results expected 7 Sept) will likely be hardest hit with

an expected cR500m net impact (net of reserve releases and reinsurance) related to

these floods, given its dominance in the region and exposure to crop and other Agri

cover. For Santam, we still expect a margin for H1 near the midpoint of its target range

(UBSE c7.1% for both H1 and FY26E versus the target range of 5-10%). For the other

insurers, we have a modest deterioration, largely in our pre-existing forecasts back