SANTAM LIMITED (Incorporated in the Republic of ) Registration Number 1918/001680/06 JSE share code: SNT ISIN: ZAE000093779 (“Santam”)

ANNOUNCEMENT REGARDING EMERGING MARKETS PARTICIPATION AND TECHNICAL SERVICES AGREEMENT WITH LIMITED AND SOME OF ITS WHOLLY OWNED SUBSIDIARIES (“SANLAM”)

1. Introduction

Santam shareholders are hereby advised that Santam has entered into a series of transactions with Sanlam (collectively the “Transaction”) in terms of which:

• Santam will participate in Sanlam’s investments in emerging market short-term insurance businesses (“Target Companies”); and • Sanlam will participate in Santam’s investment in Santam Namibia Limited (“Santam Namibia”); (collectively the “Participation Transaction”); and • Santam disposes of its 25.1% direct interest in the issued ordinary shares of NICO Holdings Limited (“NICO Holdings”), a financial services group listed on the Stock Exchange, to Sanlam (the “NICO Holdings Transaction”).

As part of the Transaction, Santam will render certain technical services to the Target Companies.

Santam will pay Sanlam a net amount of R167.7 million (“Net Payment”) which will be funded from cash resources.

Save for the NICO Holdings Transaction which became effective on 28 November 2013, the effective date of the Participation Transaction will be 2 business days after the date on which the conditions precedent have been fulfilled. The Participation Transaction is not subject to the fulfillment of any significant conditions precedent that have not yet been fulfilled.

2. Strategic rationale

The Transaction aims to align the interests of Santam and Sanlam in current and future emerging market short-term insurance investments, whilst retaining the principle of a single investor in these individual businesses. In line with these principles, the Transaction provides for Sanlam to participate in Santam’s investment in Santam Namibia and provides Santam with an entry into the Indian, South East Asian and African emerging markets and the opportunity to participate in Sanlam’s future emerging markets short-term insurance transactions. The combination of Sanlam’s governance, transaction origination and expertise in foreign emerging market jurisdictions through its established emerging markets business together with Santam’s technical role will optimise the management of risk and enhance value in the emerging markets for both parties. In principle, Sanlam and Santam will respectively participate on a 65%:35% basis in Santam Namibia and in Sanlam’s current and future investments in Target Companies.

3. The Participation Transaction

At the effective date Santam will subscribe for shares of separate classes (“Target Shares”) in Sanlam Emerging Markets Proprietary Limited (“SEM”), a wholly owned subsidiary of Sanlam, with each separate class linked to a participatory interest in the following Target Companies:

• a 15.4% participatory interest in Pacific & Orient Insurance Co. Berhad (“P&O”), incorporated in Malaysia. P&O is a niche short-term insurer based in Kuala Lumpur, Malaysia. P&O has an estimated 40% market share in motorcycle insurance, and a 3.5% share in the total short-term insurance market in Malaysia. Its gross written premium (“GWP”) for the financial year ended 30 September 2013 amounted to approximately R1.6 billion;

• a 7.0% participatory interest in Shriram General Insurance Company Limited (“SGIC”), incorporated in India. SGIC is the short-term insurance business of the Shriram Group, a financial conglomerate based in India. SGIC is positioned to be a market leader in motor insurance. SGIC wrote GWP of approximately R2.5 billion for the financial year ended 31 March 2013;

• an 18.6% participatory interest in BIHL Insurance Company Limited (“BIHL Sure”), incorporated in Botswana. BIHL Sure is a subsidiary of Botswana Insurance Holdings Limited, a company listed on the Botswana Stock Exchange. BIHL Sure is a start-up short-term insurer providing a variety of insurance products. Legal Guard is currently its main product offering; and

• an 8.7% participatory interest in the short-term insurance subsidiaries of NICO Holdings in Malawi, , and (collectively the “NICO subsidiaries”), following the disposal of Santam’s direct interest in NICO Holdings in terms of the NICO Holdings Transaction. The NICO Subsidiaries offer predominantly personal and commercial insurance products. In total, the NICO Subsidiaries wrote GWP of approximately R450 million for the financial year ended 31 December 2012. NICO General is the leading short-term insurer in Malawi with a market share of approximately 40%. NICO Zambia is one of the leading short-term insurers in Zambia, with a market share exceeding 13%.

Santam, through its wholly-owned subsidiary Santam Namibia Holdings Proprietary Limited (“Namibian HoldCo”), holds 60% of the issued ordinary shares of Santam Namibia. SEM will subscribe for Target Shares in Santam Namibia HoldCo linked to a 37.4% participatory interest in Santam Namibia. Santam Namibia is the leading short-term insurer in Namibia with a market share exceeding 30%. Santam Namibia focuses on corporate, commercial and personal markets and its GWP for the financial year ended 31 December 2012 amounted to approximately R680 million.

Santam previously held an entitlement to participate in the appreciation of SGIC above agreed minimum hurdle rates through a preference share issued by SEM and which has been redeemed at SEM’s election. Santam will now in terms of the Participation Transaction participate in 7.0% of the economic benefits of SGIC.

4. Future transactions and conditions thereto

In the event that Sanlam directly or indirectly acquires further short-term insurance investments from time to time, Santam shall subscribe for Target Shares in SEM linked in principle to a 35% participatory interest in such investments, subject to:

• Santam having sufficient capital available taking into consideration its reasonable current and future capital requirements; • compliance with the required statutory and regulatory requirements; and • Santam having obtained an independent expert’s fairness opinion confirming that the price of the Target Share is fair.

5. Financial effects

The unaudited pro-forma financial effects set out in the table below have been prepared to assist Santam shareholders to assess the impact of the Transaction on:

• earnings per Santam ordinary share (“EPS”); • diluted EPS; • headline EPS (“HEPS”); and • diluted HEPS

for the six months ended 30 June 2013; and

• net asset value (“NAV”); and • tangible NAV (“TNAV”)

per Santam ordinary share as at 30 June 2013.

For the purposes of the pro-forma financial effects, it has been assumed that the Transaction took place with effect from 1 January 2013 for Statement of Comprehensive Income purposes, and as at 30 June 2013 for Statement of Financial Position purposes. The pro-forma financial effects have been prepared for illustrative purposes only and, because of their nature, they may not fairly present Santam’s restated financial position at 30 June 2013 and the restated results of its operations for the six months then ended. The directors of Santam are responsible for the preparation of the financial effects which have not been reviewed by the auditors.

Before After % Cents Cents Change EPS for the six months ended 30 June 2013 356 325 -8.7% Diluted EPS for the six months ended 30 June 2013 353 323 -8.5% HEPS for the six months ended 30 June 2013 365 356 -2.5% Diluted HEPS for the six months ended 30 June 2013 363 353 -2.8% NAV per share as at 30 June 2013 4,956 5,208 5.1% TNAV per share as at 30 June 2013 4,009 4,261 6.3% Number of shares in issue as at 30 June 2013 (million) 114.33 114.33 - Weighted average number of shares in issue for the six 113.89 113.89 - months ended 30 June 2013 (million) Weighted average number of shares in issue for the six 114.72 114.72 - months ended 30 June 2013, for diluted EPS (million)

Notes:

1. The figures in the “Before” column were extracted from the reviewed interim report of Santam and its subsidiaries for the six months ended 30 June 2013. 2. For purposes of NAV and TNAV per share, NAV represents “Total Equity” per the Statement of Financial Position. 3. For purposes of EPS, diluted EPS, HEPS and diluted HEPS it is assumed that the Net Payment would have earned interest at an after-tax cash rate of 3.6% per annum. 4. In terms of IAS 21 The effects of changes in exchange rates (“IAS 21”), a debit Foreign Currency Translation Reserve of R34 million was previously recognised in the Statement of Changes in Equity in respect of NICO Holdings, relating to the depreciation of the Malawian Kwacha against the Rand. IAS 21 requires that such reserve be reclassified to earnings upon the disposal by Santam of NICO Holdings. The pro-forma financial effects on EPS and diluted EPS are primarily the result of the reclassification of this Foreign Currency Translation Reserve to earnings. In the absence of this, the Transaction would not have any significant impact on EPS or diluted EPS. Santam expects the Transaction to be beneficial for Santam shareholders in future.

6. Small related party transaction

Sanlam is a majority shareholder of Santam. As such, the Transaction is classified as a small related party transaction in terms of section 10 of the JSE Listings Requirements.

Rand Merchant Bank (“RMB”), a division of FirstRand Bank Ltd, has been appointed as the independent expert to provide a fairness opinion as contemplated in section 10.7(b) of the JSE Listings Requirements. RMB has found the terms and conditions of the Transaction fair to the shareholders of Santam. Their fairness opinion is available for inspection at Santam’s registered office for a period of 28 days from the date of this announcement.

Cape Town 11 December 2013

Sponsor: Investec Bank Limited