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Short Term Insurance including Direct and Travel Insurance
BY Louise Mitchell
South Africa
22 August 2018
R 10 080.00 (ZAR)  
estimated $ 718.97 (USD) *
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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.


Report Coverage


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.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Value Chain 3
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 11
4.1. Local 11
4.1.1. Corporate Actions 15
4.1.2. Regulations 18
4.1.3. Enterprise Development and Social Economic Development 24
4.2. Continental 27
4.3. International 30
5. INFLUENCING FACTORS 31
5.1. Economic Environment 31
5.2. Regulatory Environment 33
5.3. Investment Performance 34
5.4. Financial Inclusion 36
5.5. Operating Costs 37
5.6. The Automotive Aftermarket Sector 38
5.7. Crime 39
5.8. Cyber Risk 39
5.9. Information Technology, Research and Development (R&D) and Innovation 40
5.10. Labour 44
5.11. Cyclicality 46
5.12. Climate Change and Extreme Weather 46
6. COMPETITION 47
6.1. Barriers to Entry 48
7. SWOT ANALYSIS 48
8. OUTLOOK 49
9. INDUSTRY ASSOCIATIONS 50
10. REFERENCES 50
10.1. Publications 50
10.2. Websites 51
APPENDIX 1 53
Summary of Major Players 53
APPENDIX 2 56
Classes and Sub-Classes of Insurance Business for Non-Life Insurance under Schedule 2 of the Insurance Act, 2017 56
APPENDIX 3 60
New and Amended Accounting Standards and Interpretations that became effective on or after 1 January 2016 60
COMPANY PROFILES 61
ABSA INSURANCE COMPANY LTD 61
AFRICAN REINSURANCE CORPORATION (SOUTH AFRICA) LTD 63
AIG SOUTH AFRICA LTD 66
ALEXANDER FORBES INSURANCE COMPANY LTD 68
ALLIANZ GLOBAL CORPORATE AND SPECIALTY SOUTH AFRICA LTD 70
AUTO AND GENERAL INSURANCE COMPANY (RF) LTD 72
BIDVEST INSURANCE LTD 74
BRYTE INSURANCE COMPANY LTD 76
BUDGET INSURANCE COMPANY (RF) LTD 79
CENTRIQ INSURANCE COMPANY LTD 81
COFACE SOUTH AFRICA INSURANCE COMPANY LTD 83
COMPASS INSURANCE COMPANY LTD 85
CONSTANTIA INSURANCE COMPANY LTD 87
DIAL DIRECT INSURANCE (RF) LTD 89
ESCAP SOC LTD 91
EXPORT CREDIT INSURANCE CORPORATION OF SOUTH AFRICA SOC LTD 93
FEDERATED EMPLOYERS MUTUAL ASSURANCE COMPANY (RF) (PTY) LTD (THE) 96
FIRST FOR WOMEN INSURANCE COMPANY (RF) LTD 99
FIRSTRAND BANK LTD 101
GENERAL REINSURANCE AFRICA LTD 106
GIC RE SOUTH AFRICA LTD 109
GUARDRISK INSURANCE COMPANY LTD 112
HANNOVER REINSURANCE GROUP AFRICA (PTY) LTD 115
HOLLARD INSURANCE COMPANY LTD (THE) 117
INDEQUITY GROUP LTD 121
KING PRICE INSURANCE COMPANY LTD 124
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA 126
LIBERTY GROUP LTD 131
LION OF AFRICA INSURANCE COMPANY LTD 134
LOMBARD INSURANCE COMPANY LTD 137
MIWAY INSURANCE LTD 139
MMI HOLDINGS LTD 142
MUNICH REINSURANCE COMPANY OF AFRICA LTD 147
MUTUAL AND FEDERAL RISK FINANCING LTD 149
NEDGROUP INSURANCE COMPANY LTD 151
OLD MUTUAL INSURE LTD 153
OUTSURANCE INSURANCE COMPANY LTD 156
PSG KONSULT LTD 159
SANTAM LTD 163
SASRIA LTD 167
SCOR AFRICA LTD 169
STANDARD INSURANCE LTD 171
TRUSTCO GROUP HOLDINGS LTD 173