Short-Term Insurance in South Africa

South Africa’s insurance industry is struggling to grow revenue and maintain profitability due to the poor economy, the coronavirus pandemic, declining employment, reduced disposable income and increasing climate-related risks. The coronavirus pandemic has resulted in significant losses to companies, particularly in the accommodation, travel and tourism industries. Some companies launched business interruption claims and some insurers refused have refused to pay. Globally, insurance demand is expected to contract in 2020, with trade and travel-related insurance business such as marine, aviation and credit expected to have been the hardest hit.

Big Players

Of the 166 insurance companies registered with the Reserve Bank in September 2020, 86 are non-life insurers, 75 are life insurers and five are composite. Motor insurance is the largest short-term insurance class, followed by property and liability. The top 10 short-term insurers have dominated the industry for years, accounting for around 77% of gross written premiums in 2018. Santam has a market share twice the size of its closest competitor.

Industry Trends

Climate change-related catastrophes are increasing in frequency and severity and have been identified as one of the top risks for insurers. Technology is disrupting the industry and making insurance more accessible, while customers are demanding flexible and personalised insurance products tailored to their risk profiles. Stricter capital and compliance measures are making it difficult for some small players to remain viable.

Report Coverage

This report focuses on short-term insurance including direct and travel insurance in South Africa, and includes information on the size and state of the sector, key performance ratios, developments and corporate actions. There are profiles of 56 companies, including the traditional players such as Sanlam, and Old Mutual, reinsurers such as Hannover Re, GIC Re and Africa-Re, and public entities such as Sasria and Eskom’s Escap.