The report on the sector describes the current market, the latest regulatory developments and factors influencing the success of the sector. The report profiles 43 short-term insurance companies, including dominant players Santam, Hollard and Mutual & Federal (rebranded to Old Mutual Insure). It also focuses on direct insurance companies like OUTsurance and MiWay which have taken personal lines market share at the expense of traditional players and intermediaries. The report includes new entrants using digital platforms and/or serving the financially excluded low-income market with microinsurance products developed within the regulatory framework of the newly enacted Insurance Act, 2017.
Short-Term Insurance Industry
This report focuses on South Africa’s rapidly evolving short-term insurance industry, which encompasses a broad spectrum of personal and commercial lines, including various types of travel insurance. With gross premium income of R116.7bn in 2016, the short-term, or non-life insurance sub-sector, plays a key role in the financial sector and is an important contributor to economic growth. Short-term insurance companies contributed gross premium income of R108.14bn to the South African economy at the end of September 2017.
State of The Industry
Contraction and consolidation saw the number of primary insurers that were registered with the FSB decrease by 10.2% to 88 at the end of March 2017. The industry is experiencing tough trading conditions and increased regulatory obligations.
One of the industry’s most pressing challenges is the increase in frequency and severity of extreme weather events and natural disasters which included fires in Knysna, drought in the Western Cape, and storms in Gauteng and Kwazulu-Natal. Catastrophic events, changing demographics, fintech and amended regulations may significantly change the structure of the industry.