Santam, South Africa’s largest general insurer, has paused its expansion into the U.S. property insurance market as falling premiums in the world’s largest economy make it harder to justify further investment in the business.

The insurer has stopped investing in Avatar Holdings, a London-based startup that provides mid-market property insurance in the U.S. Instead, Santam plans to direct resources toward its newer U.K. operations while it waits for pricing conditions in North American property insurance to improve.

“With the rapidly softening market cycle, particularly in North American property, we’ve taken the decision” on Avatar, Santam Chief Executive Officer Tavaziva Madzinga said in an interview Thursday. “Rates have fallen significantly.”

Santam shifts focus to Lloyd’s

Santam, a unit of financial-services group Sanlam, acquired a 51% stake in Avatar for £3 million ($4 million) in July 2025. The investment was intended to help the insurer build its presence outside South Africa and increase the share of premiums generated internationally.

The decision comes as U.S. property and casualty insurers face weaker pricing and rising weather-related losses. Boston Consulting Group said the conditions have ended five years of outperformance by U.S. insurers, with the sector expected to lag European and Asia-Pacific peers for the first time since 2021.

Avatar uses a technology platform designed to help insurers underwrite and price mid-sized corporate risks more efficiently.

“While we believe that the Avatar business would have been complementary to our strategy, I think the market conditions simply don’t allow us to continue their business at this point in time,” Madzinga said.

Santam now plans to put more resources into Syndicate 1918, its Lloyd’s of London venture, which began operations Jan. 1. The syndicate underwrites property, marine, energy, cyber and political risks.

“We are quite pleased that we’ve been able to attract high-quality underwriters into the business,” Madzinga said. “Our capacity is to write £375 million ($508 million) of business.”

Syndicate 1918 generated R1.3 billion ($81.3 million) in gross written premiums during the six months through June, with R461 million ($28.8 million) recognized during the period. It reported an underwriting loss of R230 million ($14.4 million) and expects a full-year loss of as much as R550 million ($34.4 million), before reaching break-even in 2027.

India adds another growth market

Santam is also expanding its reinsurance operations in Gujarat International Finance Tec-City in India, targeting property, engineering, marine and liability risks.

The company sees India as another route to international growth, drawing on Sanlam’s partnership with Shriram Group, which dates back to 2005. Santam has also created a specialist business focused on risk-placement solutions.

The strategy reflects Santam’s broader effort to reduce its reliance on South Africa. The company generated 77% of its premiums in the domestic market, while international operations grew 25% in the six months through June, compared with 6% growth in South Africa.

Santam reported gross written premiums of R23.05 billion ($1.4 billion) for the first half of 2026, up 10.1% from R20.94 billion a year earlier.

Santam targets bigger international share

Founded in Cape Town in 1918, Santam is listed on the Johannesburg Stock Exchange, with secondary listings in Namibia and A2X Markets. Sanlam owns 62.3% of the insurer.

Santam wants international operations to contribute 30% of total premiums by 2030. The company operates across several African markets, including Malawi, Tanzania, Uganda, Zimbabwe and Zambia, and is headquartered in Bellville, Western Cape.