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South Africa Insurance Report Q2 2016

  • April 2016
  • -
  • Business Monitor International
  • -
  • 59 pages

Includes 3 FREE quarterly updates

BMI View:. The USD projections for premiums in South Africa's resilient insurance sector give a betterindication of real trends than the ZAR figures, which are boosted by persistently high inflation. Achallenging economic environment and the low levels of income for many households present headwinds inboth segments. Nevertheless, the companies are responding through effective control of costs, productinnovation, or skilful execution of multi-channel distribution strategies. In both of the main segments, theleading companies benefit from being elements of large and diverse financial groups.

Key Updates And Forecasts

- We are not making changes to our projections for life insurance premiums this quarter. We anticipate thatpremiums will rise by around 9% annually in ZAR terms through the forecast period. The effect of this isthat life penetration should rise from the current (very high) level of 11.8% of GDP to 12.3% in 2020. Inessence, growth will largely be the consequence of the fact that that life insurance is an attractive assetclass for those South African households and companies that can afford it. At the margin, though,particular companies will benefit from selling (micro-)insurance products to first-time users.

- Nor are we making changes to our projections for non-life insurance premiums. We anticipate thatpremiums will rise by around 7% annually in ZAR terms through the forecast period. This is mainly theresult of first-time users in the motor vehicle insurance sub-sector, which accounts for over 40% of totalnon-life premiums. Revenues of the motor insurers will also be boosted by inflation. First time users -and relentless increases in medical costs - should ensure that health & personal accident insurance is thefastest growing of the larger sub-sectors: we expect that premiums will rise by around 11% annually.Conversely, price competition in the property insurance sub-sector should limit annual growth to below5% for much of the forecast period. The leading companies have recently shown that they can containclaims (and other) costs: this will likely remain the case during the forecast period.

Table Of Contents

South Africa Insurance Report Q2 2016
BMI Industry View 5
Table: Headline Insurance Forecasts (South Africa 2013-2020) 5
SWOT 6
Insurance 6
Industry Forecast 8
Life Premiums Forecast 8
Table: Life Premiums (South Africa 2013-2020) 11
Table: Life Insurance Claims (South Africa 2008-2015) 11
Non-Life Premiums Forecast 12
Table: Non-Life Premiums (South Africa 2013-2020) 15
Table: Non-Life Insurance Claims, South Africa 16
Non-Life Sub-Sector Forecast 17
Table: Non-Life Insurance Premiums by Product Line (South Africa 2013-2020) 24
Insurance Risk/Reward Index 25
Sub-Saharan Africa Risk/Reward Index 25
Table: Sub-Saharan Africa Insurance Risk/Reward Index - Q216 26
Market Overview 28
Life Market Overview 28
The Product Offering 28
The Competitive Landscape 28
Table: Life Insurance Market (USDmn) 2008-2014 30
Non-Life Market Overview 32
The Product Offering 32
The Competitive Landscape 32
Table: Non-Life Insurance Market (USDmn) 2008-2014 34
Company Profile 36
Hollard 36
Liberty Holdings 39
MMI Holdings 42
Old Mutual 45
Sanlam Group 48
Zurich South Africa 51
Methodology 53
Industry Forecast Methodology 53
Risk/Reward Index Methodology 56
Table: Indicators 58
Table: Weighting of Indicators 59

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