Presentation by:

James Godden SA CIVIL AVIATION AUTHORITY 7th National Safety Seminar 24th October 2013

Santam’s experience within the

Aviation Sector

Content Page

• About Santam Ltd

• Santam Aviation Experience

About Santam Ltd

• Assets of more than R18 billion

• Annualised Gross Written Premium over R18 ,5 billion

• Leading short-term insurer with a market share of over 23%

• Santam core intermediated business insures more than 700 000

policyholders

• We insure most of the top 100 JSE listed companies

1. Our 94-year-old Company Excellent Track Record

SANTAM

AVIATION EXPERIENCE

10/31/2013

Briefly about Santam Aviation

Santam Aviation is SA’s longest

established Aviation Insurer specialising

in products which include:

• Corporate aircraft

• Private owners and sport classes

• Charter operators as well as aircraft

owners and operators liability

• Experimental aircraft

• Deductible insurance

• Agricultural aircraft

• Gliders

Composition of Santam’s Aviation Portfolio

Santam Aviation has a wide spectrum of aircraft in its portfolio

• Predominant focus is the general aviation market

• Bulk of portfolio comprised of private owner and small/medium commercial

operators

• Aircraft insured range from micro light to B 737’s

• 20% of portfolio comprised of light sport aircraft

• Portfolio predominantly comprised of South African Risks but aircraft outside of

the country are also insured by Santam

• Focus for purposes of this presentation on the South African Portion of the

portfolio

Insurance Claims: The year 2013 to date

2013 – Year to date Sep 30

Average number of claims per month: 33

Average cost of claim per month: R 6,677,777

Number of landing accidents to date: 115

Number of power line accidents: 4(not crop spraying)

40% of all claims are made up of landing accidents

Trends in Insurance Claims History

1. Predominant reason for claims are accidents as a result of pilot error /

judgment

2. Predominant sector is the private recreational area, this is particularly high

in the ZU category

– Of concern is the number of incidents/accidents that take place in

flying clubs/schools

– It is accepted that flying schools are a higher risk profile

BUT the number of unnecessary accidents are concerning

3. Accidents, especially those involving serious injuries or fatalities are more

than often avoidable.

– Poor decision making and

– in certain instances blatant recklessness are responsible for most of

these accidents

Examples of unnecessary accidents

These are numerous examples, predominant is:

• Flying in instrument conditions without the necessary licensed rating

• Misjudging landing strip length, too short for the aircraft i.e. not having

done the correct homework

• Flying overweight – often a trend in commercial operations

• Incorrect fuel management and Incorrect selection of engines in twins

(shutting the wrong engine down)

• Flying too low (borders on recklessness)

• Taking chances e.g. Trying to find a gap in the weather instead of

turning around (borders on recklessness)

The disturbing aspect of these trends is that they are largely a reflection of

poor attitude and/or poor training (usually go together)

Effects to our Insurance Industry

• Currently rates are at an all time low due to excess capacity in the

market (world wide phenomenon)

• Low rates mean reduced premium for insurers

• Escalation in claims continues as does the cost of repair and liability

claims

• Insurers will be forced in the near future if the current trend

continues to either push up rates or to consider exiting this

insurance sector

Fair to say the situation is relatively critical at the moment

Where to from here?

• Greater cooperation between insurance industry and CAA will be

necessary, especially when it comes to information sharing e.g.

growing accident trends

• Knowledge exchange can assist in proactive preventative measures

put into effect

• Cooperation between CAA and insurers to collaborate on safety

campaigns and incentives put in place

– Initiatives like this safety symposium are needed and should

become more common place

• A good look at training standards in all our flying schools needs to be

taken with particular focus on training attitude

Our role going forward

• Share claims data with CAA

• Highlight claim trends

• Make sure legislation in Aviation is upheld

• Educate our clients