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Life Insurance Sector
This report focuses on the latest developments in South Africa’s life insurance sector, which is the largest life insurance market on the African continent and in US dollar terms is the 15th-largest life insurance market in the world. With benefit payments of R366.8bn and assets of R2.3-trillion in the 12 months ended 30 June 2015, the 73 companies active in the long-term insurance industry are the custodians of a sizeable portion of South Africa’s long-term savings pool. Total net life reassurance premiums of over R8bn at the end of December 2014 were reported by the seven life reassurance companies in operation.
If premiums are measured as a percentage of the nation’s GDP, the country has one of the highest levels of life insurance penetration in the world. However, recent statistics reveal that 40% of the country’s adult population do not have any form of formal life insurance. This is in sharp contrast to the funeral policy category which accounts for almost 90% of all risk cover sold and emphasises the need for the development of affordable life insurance products for low-income earners. Analysts caution that if South Africa’s life insurance industry is to remain sustainable in the long-term, the socio-economic context in which it operates needs to be overhauled. In the meantime, the potential for growth in sub-Saharan African markets has resulted in brisk merger and acquisition activity by South Africa’s major life insurance companies.
The report on the highly competitive South African Life Insurance sector describes the current market, Government’s proposed regulations regarding credit life insurance and discusses factors influencing the success of the sector. The report profiles 44 companies, including the “Big Four”, Old Mutual Life, MMI Holdings, Sanlam and the Liberty Group. Also profiled are all seven reassurance companies active in the country and the leading direct life insurance company, Clientèle Life Assurance Company Ltd.