Life Insurance in South Africa includes written premium, incurred loss, loss ratio, commissions and expenses, total assets, total investment income and retentions. The life insurance operating in the South Africa includes details of insurance regulations, and recent changes in the regulatory structure. Life insurances account for more than a three fourth of the South African insurance gross written premiums.
South Africa population are aware about the life insurance programs available. There are ten leading insurance companies offering written premiums in South Africa. The life insurance schemes are available at the preferred distribution channels such as brokers, agencies and bancassurance. With the unemployment rate significantly high in South Africa the trend in the life insurance is declining. The majority of the premiums in South Africa gave up the non-life segment. The personal accident and health segment are the majorly covered premiums in South Africa. An excess reinsurance capacity was observed with the reduced severity of the natural disasters. Reinsurance is an integral component of South Africa risk management plans applicable to the frequent natural disasters.
According to the NATIONAL Insurance Commission (NAICOM) in South Africa there are twelve leading insurance companies such as Great Nigeria Insurance Plc’s, Insurance Resourcery Consultancy Services Limited (IRCSL), an Ivoirien insurer, Sunu Assurances Vie Cote d’Ivoire, Equity Assurance, Cornerstone Insurance, UNIC Insurance Plc, Liberty Chief Executive, Thabo Dloti, Standard Alliance Insurance Plc, and others such as Axa, Prudential, Liberty, Swiss RE, Sunu Group, Saham.
According to the report, “Life Insurance in South Africa, Key Trends and Opportunities to 2020”, South Africa’s top six insurance companies are Metropolitan, Discovery, Old Mutual, Liberty, Momentum and Sanlam. Metropolitan Life’s products are more satisfying insurance schemes in South Africa. It was observed that there is a consistent development in the service quality of companies such as Metropolitan and Old Mutual. Discovery fell short in both quality and value, thus leading to unsuccessful business. Metropolitan enjoys the highest customer loyalty score equal to the Momentum’s loyalty score. Old Mutual, Sanlam, Liberty and Discovery are on the same page with customer loyalty score.
With the current economic situation in South Africa, it is predicted that there has been an increase in policy cancellations. Life and pensions schemes are prominent to lead a peaceful life after retirement. There is an increasing demand for retirement products due increase in the longer living global population and a growing need for wealth protection. The growing population in the country demands for more life insurance schemes and policies.
South African Constitution says that every individual in the country has the right to have access to health care services. Majority of the population in South Africa do not have any medical insurance and depend on a public health system with few doctors and dilapidated facilities that result in delay of medical treatment. The government implemented a National Health Insurance plan in the year 2009 that would cover medical facilities for all its citizens and would take almost another decade to get into full swing.
The poorest people in South Africa are provided with free services and medicines but with insufficient medical facilities. A survey states that a part of the population is not covered for health insurance, or life insurance or any long-term disability insurance.
A recent research states that the short-term insurance schemes in South Africa has been slowed to go digital and the sector is losing out on gross written premiums opportunities. Majority of the life insurance companies suggest that influencing cost efficient distribution channels like bancassurance, internet and or mobile phone distribution will be a key to selling life insurance to the population living in low income countries, including Nigeria. The life insurance industry in South Africa is a challenging market and given sluggish domestic economic growth for the country.
South Africa is one of the most advanced life insurance markets in the world, accounting for approximately 86% of Africa’s total life premiums. This market is concentrated around Lagos in the south west and Nigeria’s in the north. African insurance premium volumes have dropped sharply due to the currency depreciation in the country, high poverty rate, lack of capital, expertise within insurance companies, lack of effective and transparent legal, judicial and regulatory systems, combined with immature financial markets which are the major factors affecting the life insurance market in South Africa.
Besides all the hurdles, the life insurance industry in the next decade will witness a radical change in customers reducing sharply in favour of digital natives as the omnichannel revolution has begun to shape the future of the industry. The percentage of life insurance policies sold online will be doubled in the next decade along with South Africa’s growing economic conditions.
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