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    • Life Insurance Industry South Africa

    The Life Insurance Industry in South africa 2024

    Michael Felton | South Africa | 13 June 2024

    The Life Insurance Industry in South Africa 2022

    Alex Conradie | South Africa | 18 October 2022

    The Life Insurance Industry in South Africa 2021

    Louise Mitchell | South Africa | 18 January 2021

    The Life Insurance Industry in South Africa 2019

    Louise Mitchell | South Africa | 31 January 2019

    The Life Insurance Industry in South Africa 2017

    Carole Veitch | South Africa | 22 May 2017

    The Life Insurance Industry in South Africa 2015

    Carole Veitch | South Africa | 02 December 2015

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report on the life insurance industry in South Africa includes comprehensive information on insurance, underwriting, distribution channels, penetration rates, claims, premium income, volumes and profitability. It examines notable players and their performance, corporate actions, and regulatory and compliance issues. There are profiles of 28 companies including major players such as Sanlam, Old Mutual, Liberty and Momentum Metropolitan, local insurance companies such as Assupol, Clientele and Hollard, reinsurers including Munich Reinsurance, General Reinsurance Africa and RGA Reinsurance and major funeral and insurance companies such as Avbob.

    Introduction

    • Despite a two-year disruption caused by the pandemic and volatile global markets, the life insurance industry recorded significant improvements in 2023 and it remains robust, solvent and liquid.\r\n
    • The large life insurers have substantial interests across the financial landscape and large holdings in various industrial and commercial entities.\r\n
    • South Africa has one of the most competitive insurance markets globally.\r\n
    • The role of life insurance in wealth preservation and intergenerational wealth transfer has become increasingly significant.\r\n
    • Gross written premiums increased in 2023 and are expected to grow in the near term.\r\n
    • Key trends include digital transformation, customer-centric approaches, regulatory compliance, and implementation of proactive risk mitigation strategies.\r\n
    • Africa is widely regarded as a key long-term growth market for insurance, providing opportunities for local life insurance companies.

    Trends

    • Continued focus on regulatory compliance including enhancing transparency, consumer protection and fair treatment.
    • Diversification of distribution channels such as digital channels, bancassurance partnerships, and direct-to-consumer sales models.
    • ESG considerations are increasingly influencing investment decisions.
    • Expansion of distribution channels.
    • Focus on customer-centricity.
    • Growing demand for parametric insurance cover.
    • Increasing recognition of financial inclusion.
    • Introduction of microinsurance products and simplified underwriting processes.
    • Significant digital transformation, investment in digital platforms, apps and online distribution channels.

    Opportunities

    •  Affinity partnerships with organisations to reach specific customer segments.
    • Collaboration with insurtechs and startups.
    • Demand for innovative, flexible and customisable products.
    • Demand for retirement income solutions and coverage related to aging and healthcare costs.
    • Development of affordable, microinsurance policies.
    • Differentiation through customer-centric approaches.
    • Digital transformation and technology.
    • Emerging markets expansion.
    • Expansion of distribution channels.
    • Focus on wellness and prevention programmes and partnerships with telehealth providers.
    • Integration of ESG factors.
    • Investing in regulatory compliance programmes, consumer protection initiatives and governance structures.
    • Leveraging data analytics and predictive modelling.

    Challenges

    •  Distribution challenges, including limited access to insurance products in rural areas, underdeveloped distribution networks, and competition from alternative distribution channels.
    • Affordability remains a barrier to insurance uptake.
    • Cybersecurity and data privacy concerns.
    • Fraudulent activities and claims, misrepresentation by policyholders and misconduct and unethical behaviour.
    • High unemployment, income inequality and economic challenges and uncertainty contribute to limited access and low penetration of life insurance products.
    • Market saturation and competition.
    • Outdated legacy systems and inefficient processes requiring adaption to modern technology.
    • Regulatory compliance and governance.
    • Social and demographic changes.
    • Transparency, disclosure of terms and conditions, consumer education and handling of customer complaints.
    • Volatility in financial markets, economic uncertainty and regulatory changes.

    Outlook

    • Life insurers’ results improved significantly in 2023 and industry analysts forecast sustained growth over the medium term.\r\n
    • Premium income growth potential will be affected by population growth, innovation, economic conditions, and awareness and education of consumers.\r\n
    • Possible adoption of more stringent solvency regulations may potentially affect the industry in the long-term.\r\n
    • The industry remains stable and continues to be trusted by customers.\r\n
    • Many of the notable players see enormous potential in Asia, for near-term growth, and in Africa in the long term.\r\n
    • Cyber risk and data privacy issues continue to be a threat.

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    The Life Insurance Industry in South africa
    The Life Insurance Industry in South africa 2024

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    The Life Insurance Industry in South Africa 2022-10-18

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    The Life Insurance Industry in South Africa 2021-01-18

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    The Life Insurance Industry in South Africa 2019-01-31

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    The Life Insurance Industry in South Africa 2017-05-22

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 4
    2.2. Size of the Industry 6
    3. LOCAL 12
    3.1. State of the Industry 12
    3.2. Key Trends 23
    3.3. Key Issues 24
    3.4. Notable Players 24
    3.5. Corporate Actions 26
    3.6. Regulations 27
    3.7. Enterprise Development and Social Development 29
    4. AFRICA 32
    5. INTERNATIONAL 41
    6. INFLUENCING FACTORS 48
    6.1. Unforeseen Events 48
    6.2. Economic Environment 49
    6.3. Labour 50
    6.4. Environmental Issues 53
    6.5. Crime and Road Accidents 55
    6.6. Technology, R&D, Innovation 58
    6.7. Investment Performance 59
    6.8. Financial Inclusion 61
    6.9. Input Costs 64
    7. COMPETITIVE ENVIRONMENT 65
    7.1. Competition 65
    7.2. Ownership Structure of the Industry 66
    7.3. Barriers to Entry 67
    8. INDUSTRY SUMMARY 68
    9. OUTLOOK 69
    10. INDUSTRY ASSOCIATIONS 70
    11. REFERENCES 71
    11.1. Publications 71
    11.2. Websites 73
    ANNEXURE 1 - Industry Legislation and Regulations 75
    APPENDIX 1 - Life Insurance Classes under Schedule 2 of the Insurance Act, 2017 86
    APPENDIX 2 - List of Life Insurers, April 2024 89
    APPENDIX 3 - Summary of Notable Players 94
    COMPANY PROFILES 98
    1 LIFE INSURANCE (RF) LTD 98
    3SIXTY LIFE LTD 100
    ABSA LIFE LTD 102
    AFFINITY LIFE LTD 104
    AIG LIFE SOUTH AFRICA LTD 106
    ASSUPOL LIFE LTD 108
    AVBOB MUTUAL ASSURANCE SOCIETY 110
    BIDVEST LIFE LTD 113
    CENTRIQ LIFE INSURANCE COMPANY LTD 115
    CLIENTELE LIFE ASSURANCE COMPANY LTD 117
    DISCOVERY LIFE LTD 119
    GENERAL REINSURANCE AFRICA LTD 121
    GUARDRISK LIFE LTD 124
    HANNOVER RE SOUTH AFRICA LTD 126
    HOLLARD LIFE ASSURANCE COMPANY LTD 129
    KING PRICE LIFE INSURANCE LTD 132
    LIBERTY GROUP LTD 134
    MOMENTUM METROPOLITAN LIFE LTD 137
    MUNICH REINSURANCE COMPANY OF AFRICA LTD 141
    NEDGROUP LIFE ASSURANCE COMPANY LTD 143
    NEDGROUP STRUCTURED LIFE LTD 145
    OLD MUTUAL LIFE ASSURANCE COMPANY (SOUTH AFRICA) LTD 147
    OUTSURANCE LIFE INSURANCE COMPANY LTD 152
    PROFESSIONAL PROVIDENT SOCIETY INSURANCE COMPANY LTD 154
    RGA REINSURANCE COMPANY OF SOUTH AFRICA LTD 157
    SANLAM LIFE INSURANCE LTD 159
    SCOR AFRICA LTD 164
    SWISS RE AFRICA LTD 166

    Report Coverage

    This report on the life insurance industry in South Africa includes information on the size and state of the sector, performance indicators, market shares, corporate actions notable players and developments. There are profiles of 28 companies including notable players such as Sanlam, Old Mutual, Liberty, Discovery, AVBOB, reinsurance companies including RGA and Munich Reinsurance and cell captive insurers such as Centriq.

    Introduction

    • The life insurance industry remained profitable and well capitalised despite record high claim payouts in 2021. \r\n
    • The industry’s total income and profit increased in 2021 compared to 2019 and 2020. \r\n
    • COVID-19 made people more aware of risks, causing higher demand for life insurance products.\r\n
    • Africa is a key long-term growth market for insurance, providing opportunities for local life insurance companies. \r\n
    • The industry’s growth is affected by the weak economy, unemployment and inflation that are reducing disposable income.

    Strengths

    • Large number of well-established companies.
    • The industry is highly competitive, well capitalised and financially sound.

    Weaknesses

    • Shortage of skills, especially technology skills.

    Opportunities

    • Can grow customer base by increasing financial inclusion.
    • COVID-19 made people more aware of the potential risks they face, causing higher demand for life insurance products.
    • Insurance penetration is low in Africa, signifying an untapped market.

    Threats

    • Decreasing disposable income of consumers caused by the weak economy and rising unemployment and inflation.
    • Insurtech companies.

    Outlook

    • Globally, life insurance premiums are expected to contract marginally in real terms in 2022, largely due to high inflation, financial market volatility and economic uncertainty. \r\n
    • Premiums are forecast to increase in 2023. \r\n
    • COVID-19 related claims are expected to decrease gradually, and the industry’s profitability should improve in the longer term due to higher investment returns as a result of rising interest rates. \r\n
    • The local market is expected to shrink over the next year due to decreasing disposable income. \r\n
    • A higher death rate than before the pandemic is expected over the next few years due to delayed or missed treatments for serious conditions.

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    The Life Insurance Industry in South Africa 2022

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    The Life Insurance Industry in South africa 2024-06-13

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    The Life Insurance Industry in South Africa 2021-01-18

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    The Life Insurance Industry in South Africa 2019-01-31

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    The Life Insurance Industry in South Africa 2017-05-22

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    The Life Insurance Industry in South Africa 2015-12-02

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 2
    2.2. Geographic Position 3
    2.3. Size of the Industry 4
    2.4. Key Success Factors and Pain Points 6
    3. LOCAL 6
    3.1. State of the Industry 6
    3.2. Key Trends 11
    3.3. Notable Players 11
    3.4. Corporate Actions 15
    3.5. Regulations 16
    3.6. Enterprise Development and Social Economic Development 18
    4. AFRICA 19
    5. INTERNATIONAL 23
    6. INFLUENCING FACTORS 26
    6.1. COVID-19 and other Health Conditions 26
    6.2. Economic Environment 28
    6.3. Technology, Research and Development (R&D) and Innovation 29
    6.4. Crime and Road Accidents 31
    6.5. Environmental Issues 33
    6.6. Investment Performance 34
    6.7. Financial Inclusion 35
    6.8. Labour 36
    7. COMPETITIVE ENVIRONMENT 37
    7.1. Competition 37
    7.2. Ownership Structure of the Industry 38
    7.3. Barriers to Entry 38
    8. SWOT ANALYSIS 39
    9. OUTLOOK 39
    10. INDUSTRY ASSOCIATIONS 40
    11. REFERENCES 40
    11.1. Publications 40
    11.2. Websites 41
    APPENDICES 42
    Appendix 1 - Classes and Sub-Classes of Insurance Business for Life Insurance under Schedule 2 of the Insurance Act, 2017 42
    Appendix 2 - List of Life Insurers, August 2022 46
    Appendix 3 - Summary of Notable Players 49
    COMPANY PROFILES 53
    1 Life Insurance (RF) Ltd 53
    3Sixty Life Ltd 56
    Absa Life Ltd 58
    AIG Life South Africa Ltd 60
    Assupol Life Ltd 62
    AVBOB Mutual Assurance Society 65
    Bidvest Life Ltd 68
    Centriq Life Insurance Company Ltd 70
    Clientele Life Assurance Company Ltd 72
    Constantia Life and Health Assurance Company Ltd 74
    Discovery Life Ltd 76
    General Reinsurance Africa Ltd 78
    Guardrisk Life Ltd 81
    Hannover Re South Africa Ltd 83
    Hollard Life Assurance Company Ltd 85
    King Price Life Insurance Ltd 88
    Liberty Group Ltd 90
    Momentum Metropolitan Life Ltd 93
    Munich Reinsurance Company of Africa Ltd 96
    Nedgroup Life Assurance Company Ltd 98
    Nedgroup Structured Life Ltd 100
    Old Mutual Life Assurance Company (South Africa) Ltd 102
    OUTsurance Life Insurance Company Ltd 107
    Professional Provident Society Insurance Company Ltd 109
    RGA Reinsurance Company of South Africa Ltd 112
    Sanlam Life Insurance Ltd 114
    SCOR Africa Ltd 119
    Swiss Re Africa Ltd 121

    Report Coverage

    This report focuses on the life insurance industry including reinsurance, and examines the state and size of the sector, key performance indicators, corporate actions and various influencing factors. There are profiles of 45 companies including large traditional insurers such as Sanlam and Old Mutual and relatively new players such as African Rainbow Capital, which was launched in 2019. There are also profiles of reinsurers such as Swiss Re and Munich Reinsurance.

    Introduction

    Life cover plays a central role in safeguarding financial security, as it provides an income stream to dependants who would otherwise suffer financial loss in the event of the death, disability or serious illness of a breadwinner. Life insurers are adequately capitalised according to Prudential Authority solvency and liquidity requirements. The coronavirus pandemic has put pressure on new business, policy lapse rates and potential future claims. OUTsurance Life for instance, recorded new business to the value of R9.4m in June 2020, down by 75.5% from June 2019. In June 2020, policies to the value of R20.7bn lapsed, of which R15.7bn were funeral policies of individuals and grouped individuals (group schemes for employees). This is a reflection of the impact that the lockdown had on the disposable income of consumers.

    Strengths

    • South Africa’s life insurance and life reinsurance industries are regulated, well capitalised and financially sound.
    • The industry is highly competitive.

    Weaknesses

    • Life insurance is increasingly unaffordable for most people.
    • There is a relatively low level of product differentiation and product development has not adequately addressed the needs of lower income earners.
    • There is a skills deficit in the sector.

    Opportunities

    • Mobile insurance.
    • The development of affordable, client-centric insurance and microinsurance products for South Africa’s largely uninsured or underinsured low-income earners.

    Threats

    • Economic policy uncertainty, recessionary pressures and socio-political tensions.
    • The industry is highly exposed to the volatility of local and global financial markets.
    • The performance of equities has been weak.
    • The rising cost of reinsurance.

    Outlook

    Growth in the sector will be constrained by low interest rates and economic pressure. The global financial crisis brought about by the coronavirus pandemic poses a major challenge for insurers’ profitability, especially given that they derive the vast majority of their profits from investment income. EY said insurers need to improve their financial performance and embrace disruptive technologies and big data to develop new business models, new value propositions and new products to re-ignite growth. KPMG pointed that coronavirus has created an opportunity for insurers to innovate and enhance current product offerings and, rethink future product offerings to cater for these unique situations.

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    The Life Insurance Industry in South Africa
    The Life Insurance Industry in South Africa 2021

    Full Report

    R 1 900.00(ZAR) estimated $104.50 (USD)*

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    Industry Landscape

    R 1 330.00(ZAR) estimated $ 73.15 (USD)*

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    Historical Reports

    The Life Insurance Industry in South africa 2024-06-13

    R 20 000.00(ZAR) estimated $1099.99 (USD)*

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    The Life Insurance Industry in South Africa 2022-10-18

    R 6 500.00(ZAR) estimated $357.50 (USD)*

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    The Life Insurance Industry in South Africa 2019-01-31

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    The Life Insurance Industry in South Africa 2017-05-22

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    The Life Insurance Industry in South Africa 2015-12-02

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 4
    2.2. Geographic Position 5
    3. SIZE OF THE INDUSTRY 5
    4. STATE OF THE INDUSTRY 8
    4.1. Local 8
    4.1.1. Corporate Actions 10
    4.1.2. Regulations 11
    4.1.3. Enterprise Development and Social Economic Development 15
    4.2. Continental 17
    4.3. International 18
    5. INFLUENCING FACTORS 21
    5.1. Coronavirus 21
    5.2. Economic Environment 22
    5.3. Investment Performance 23
    5.4. Financial Inclusion 23
    5.5. Environmental, Social and Governance (ESG) 24
    5.6. Rising Input Costs 25
    5.7. Crime 25
    5.8. Cyber Risk 25
    5.9. Technology, Research & Development (R&D) and Innovation 26
    5.10. Labour 27
    6. COMPETITION 29
    6.1. Barriers to Entry 30
    7. SWOT ANALYSIS 30
    8. OUTLOOK 31
    9. INDUSTRY ASSOCIATIONS 31
    10. REFERENCES 32
    10.1. Publications 32
    10.2. Websites 32
    APPENDIX 1 34
    Classes and Sub-Classes of Insurance Business for Life Insurance under Schedule 2 of the Insurance Act, 2017 34
    APPENDIX 2 - SUMMARY OF NOTABLE PLAYERS 38
    Primary Insurers 38
    Reinsurance Companies 41
    COMPANY PROFILES 43
    1 LIFE INSURANCE (RF) LTD 43
    3SIXTY LIFE LTD 45
    ABSA LIFE LTD 47
    AFRICAN RAINBOW LIFE LTD 49
    AFRICAN UNITY LIFE LTD 51
    AIG LIFE SOUTH AFRICA LTD 53
    ALEXANDER FORBES INVESTMENTS LTD 55
    ALEXANDER FORBES LIFE LTD 57
    ALLAN GRAY LIFE LTD 58
    ASSUPOL LIFE LTD 60
    AVBOB MUTUAL ASSURANCE SOCIETY 62
    BIDVEST LIFE LTD 65
    BRIGHTROCK LIFE LTD 67
    CLIENTELE LIFE ASSURANCE COMPANY LTD 69
    CORONATION LIFE ASSURANCE COMPANY LTD 71
    DISCOVERY LIFE LTD 73
    FEDGROUP LIFE LTD 75
    GENERAL REINSURANCE AFRICA LTD 77
    GIC RE SOUTH AFRICA LTD 80
    GUARDRISK LIFE LTD 83
    HANNOVER REINSURANCE GROUP AFRICA (PTY) LTD 85
    HOLLARD LIFE ASSURANCE COMPANY LTD 87
    HOLLARD SPECIALIST LIFE LTD 90
    INVESTEC LIFE LTD 93
    LAND BANK LIFE INSURANCE COMPANY SOC LTD 95
    LIBERTY HOLDINGS LTD 97
    LION OF AFRICA LIFE ASSURANCE COMPANY LTD 103
    MOMENTUM METROPOLITAN LIFE LTD 105
    MUNICH REINSURANCE COMPANY OF AFRICA LTD 108
    NEDGROUP LIFE ASSURANCE COMPANY LTD 110
    NEDGROUP STRUCTURED LIFE LTD 112
    OLD MUTUAL LIFE ASSURANCE COMPANY (SOUTH AFRICA) LTD 114
    OUTSURANCE LIFE INSURANCE COMPANY LTD 119
    PROFESSIONAL PROVIDENT SOCIETY INSURANCE COMPANY LTD 121
    PRUDENTIAL PORTFOLIO MANAGERS (SOUTH AFRICA) LIFE LTD 124
    PSG KONSULT LTD 126
    RAND MUTUAL ASSURANCE COMPANY LTD (THE) 130
    RGA REINSURANCE COMPANY OF SOUTH AFRICA LTD 133
    SANLAM LIFE INSURANCE LTD 136
    SCOR AFRICA LTD 141
    STANDARD GENERAL INSURANCE COMPANY LTD (THE) 143
    STRATEGIC INVESTMENT SERVICE (PTY) LTD 145
    SWISS RE AFRICA LTD 146
    SYGNIA LIFE LTD 148
    VODACOM LIFE ASSURANCE COMPANY (RF) LTD 150

    Report Coverage

    This report provides a comprehensive overview of the insurance and reinsurance sector in South Africa and on the continent with industry statistics largely covering 2017. There are detailed profiles of 43 companies including major insurers Old Mutual, MMI, Liberty and Sanlam, direct life insurers such as Clientèle Life, 1Life and OUTsurance and reinsurers such as Munich Re and Swiss Re.

    Introduction

    The South African life insurance industry, which contributed R469bn to the local economy through total benefit payments to policyholders and beneficiaries during 2017, currently holds assets of around R3.1-trillion. Even though total individual benefits paid in 2017, amounting to R207.5bn, showed minimal year-on-year growth, the increase in critical illness and murders in South Africa are a potential driver of future increases in benefits paid. Death claims, which made up 78.5% of risk claims, decreased by 1.2% over the 12-months to 30 June 2018. The declining mortality rate, as reported by Stats SA, might be a contributing factor of the lower growth in death benefit claims. Analysts and role players concur that the industry is in a transformational phase as a new regulatory regime is being implemented. Technological change is another driver of the transformation with the rise of insurtech startups widely regarded as a major disruptor of the industry.

    Strengths

    • Governance and risk management are reputed to be of a high standard.
    • South Africa’s life insurance and life reinsurance industries are regulated, well capitalised and financially sound.
    • The industry is a custodian of a substantial portion of the national savings pool.
    • The industry is highly competitive.

    Weaknesses

    • A life insurance culture is lacking in South Africa. With the exception of funeral cover, penetration of the market is low and the level of underinsurance is critically high.
    • Reinsurance capacity in the local market is relatively concentrated.
    • The industry is constrained by over-regulation.
    • There is a relatively low level of product differentiation and product development has not adequately addressed the needs of lower income earners.
    • There is a skills deficit in the sector.

    Opportunities

    • New regulations for microinsurers would create opportunities for SMMEs to grow market share or for new entrants.
    • The advent of mobile insurance.
    • The development of affordable, client-centric insurance and microinsurance products for South Africa’s largely uninsured or underinsured low-income earners.
    • The emerging life insurance industry in sub-Saharan Africa offers many opportunities for expansion.
    • The emerging middle class in Africa represents a valuable pool of potential new policyholders.
    • The insurance gap on death and disability for millennials provides opportunities to increase new business premiums.

    Threats

    • Climate-related events caused by extreme weather lead to an increase in the loss of life that increase death benefits and impact on insurers’ profit margins.
    • Economic policy uncertainty, recessionary pressures and the escalation of socio-political tensions.
    • Insurance companies host databases with sensitive client data and as such they are targets of cybercrime.
    • Insurtech companies are a threat to new business growth of traditional insurers.
    • Over-regulation, the high cost of regulatory compliance and new minimum capital requirements could force small companies out of business.
    • Regulatory changes, together with technology-driven disruption are expected to further undermine the role of the insurance broker.
    • The high level of insurance fraud.
    • The industry is highly exposed to the volatility of local and global financial markets.
    • The performance of equities, the major investment class of primary life insurers, has been weak.
    • The rising cost of reinsurance.

    Outlook

    Although signs of improved optimism are emerging, analysts believe profitability of life insurers in 2019 will remain below historical levels. This is due to the erosion of wealth and low investor and consumer confidence. Economic pressures are widely expected to drive up the policy lapse and surrender rates and, with the exception of new recurring premium savings business, analysts predict that new life insurance business will decline, as consumers endeavour to reduce their expenditure. The sector is, however, generally expected to remain resilient due to its strong capitalisation. S&P Global ratings believe companies are well prepared for forthcoming regulatory changes that will provide more business certainty over time. The ratings agency expects international M&A expansion to be more selective than in recent years, with a focus on the domestic market and post-merger integrations.

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    The Life Insurance Industry in South Africa
    The Life Insurance Industry in South Africa 2019

    Full Report

    R 1 900.00(ZAR) estimated $104.50 (USD)*

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    Industry Landscape

    R 1 330.00(ZAR) estimated $ 73.15 (USD)*

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    Historical Reports

    The Life Insurance Industry in South africa 2024-06-13

    R 20 000.00(ZAR) estimated $1099.99 (USD)*

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    The Life Insurance Industry in South Africa 2022-10-18

    R 6 500.00(ZAR) estimated $357.50 (USD)*

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    The Life Insurance Industry in South Africa 2021-01-18

    R 1 900.00(ZAR) estimated $104.50 (USD)*

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    The Life Insurance Industry in South Africa 2017-05-22

    R 1 900.00(ZAR) estimated $104.50 (USD)*

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    The Life Insurance Industry in South Africa 2015-12-02

    R 1 900.00(ZAR) estimated $104.50 (USD)*

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Supply Chain 4
    2.2. Geographic Position 5
    3. SIZE OF THE INDUSTRY 5
    4. STATE OF THE INDUSTRY 7
    4.1. Local 7
    4.1.1. Corporate Actions 12
    4.1.2. Regulations 13
    4.1.3. Enterprise Development and Social Economic Development 20
    4.2. Continental 22
    4.3. International 25
    5. INFLUENCING FACTORS 27
    5.1. Economic Environment 27
    5.2. Investment Performance 28
    5.3. Financial Inclusion 29
    5.4. Environmental, Social and Governance (ESG) 31
    5.5. Operating Costs 31
    5.6. Crime 32
    5.7. Cybercrime 33
    5.8. Information Technology (IT), Research & Development (R&D) and Innovation 33
    5.9. Labour 36
    5.10. Cyclicality 39
    5.11. Climate Change and Extreme Weather 39
    5.12. Fraudulent Claims 40
    6. COMPETITION 42
    6.1. Barriers to Entry 43
    7. SWOT ANALYSIS 44
    8. OUTLOOK 45
    9. INDUSTRY ASSOCIATIONS 46
    10. REFERENCES 46
    10.1. Publications 46
    10.2. Websites 47
    APPENDIX 1 - SUMMARY OF NOTABLE PLAYERS 49
    Primary Insurers 49
    Reinsurance Companies 51
    APPENDIX 2 52
    Classes and Sub-Classes of Insurance Business for Life Insurance under Schedule 2 of the Insurance Act, 2017 52
    COMPANY PROFILES 56
    1 LIFE INSURANCE (RF) LTD 56
    3SIXTY LIFE LTD 58
    ABSA LIFE LTD 59
    AFRICAN UNITY LIFE LTD 61
    AIG LIFE SOUTH AFRICA LTD 63
    ALEXANDER FORBES INVESTMENTS LTD 65
    ALEXANDER FORBES LIFE LTD 68
    ALLAN GRAY LIFE LTD 69
    ASSUPOL LIFE LTD 71
    AVBOB MUTUAL ASSURANCE SOCIETY 73
    BIDVEST LIFE LTD 76
    BOPHELO LIFE INSURANCE LTD 78
    BRIGHTROCK LIFE LTD 80
    CLIENTELE LIFE ASSURANCE COMPANY LTD 82
    CORONATION LIFE ASSURANCE COMPANY LTD 84
    DISCOVERY LIFE LTD 86
    FEDGROUP LIFE LTD 88
    GENERAL REINSURANCE AFRICA LTD 90
    GIC RE SOUTH AFRICA LTD 93
    GUARDRISK LIFE LTD 96
    HANNOVER REINSURANCE GROUP AFRICA (PTY) LTD 98
    HOLLARD LIFE ASSURANCE COMPANY LTD 100
    HOLLARD SPECIALIST LIFE LTD 103
    LAND BANK LIFE INSURANCE COMPANY SOC LTD 106
    LIBERTY HOLDINGS LTD 108
    LION OF AFRICA LIFE ASSURANCE COMPANY LTD 113
    MMI GROUP LTD 115
    MUNICH REINSURANCE COMPANY OF AFRICA LTD 118
    NEDGROUP LIFE ASSURANCE COMPANY LTD 120
    NEDGROUP STRUCTURED LIFE LTD 122
    OLD MUTUAL LIFE ASSURANCE COMPANY (SOUTH AFRICA) LTD 124
    OUTSURANCE LIFE INSURANCE COMPANY LTD 129
    PROFESSIONAL PROVIDENT SOCIETY INSURANCE COMPANY LTD 131
    PRUDENTIAL PORTFOLIO MANAGERS (SOUTH AFRICA) LIFE LTD 134
    PSG KONSULT LTD 136
    RAND MUTUAL ASSURANCE COMPANY LTD (THE) 140
    RGA REINSURANCE COMPANY OF SOUTH AFRICA LTD 143
    SANLAM LIFE INSURANCE LTD 146
    SCOR AFRICA LTD 151
    STANDARD GENERAL INSURANCE COMPANY LTD (THE) 153
    STRATEGIC INVESTMENT SERVICE LIFE COMPANY LTD 155
    SWISS RE AFRICA LTD 156
    SYGNIA LIFE LTD 158

    Introduction

    The South African life insurance industry, which contributed R429.3bn to the local economy through benefit payments to policyholders and beneficiaries during the course of 2016, currently holds assets of around R2.63-trillion. The strongly capitalised life insurance and reinsurance sector falls under the long-term insurance umbrella and is viewed as the custodian of a substantial portion of the nation’s long-term savings pool. As South Africa’s life insurers prepare for another wave of wide-ranging regulatory disruption, they find themselves facing new risks emanating from the recent sovereign credit ratings downgrade of the South African economy to “junk” status. The proposed nationalisation of life insurance companies, as mooted by Professor Chris Malikane, the recently appointed advisor to South Africa’s new Finance Minister Malusi Gigaba, is widely expected to further dampen investor confidence in the country.

    Strengths

    • Governance and risk management are reputed to be of a high standard.
    • South Africa’s life insurance and life reinsurance industries are regulated, well capitalised and financially sound. The sector has proved to be resilient and stable during times of economic recession.
    • The industry is a custodian of a substantial portion of South Africa’s national savings pool.
    • The life insurance industry is highly competitive.

    Weaknesses

    • A life insurance culture is lacking in South Africa. With the exception of funeral cover, penetration of the market is low and the level of underinsurance is critically high.
    • Reinsurance capacity in the local market is relatively concentrated.
    • Some pricing practices, such as those applicable to HIV-positive policyholders, are not risk-based.
    • The industry is constrained by over-regulation.
    • There is a relatively low level of product differentiation and product development has not adequately addressed the needs of lower income earners.
    • There is a skills deficit in the sector.

    Opportunities

    • The advent of mobile insurance.
    • The development of affordable, client-centric insurance and micro-insurance products for South Africa’s largely uninsured or underinsured low-income earners.
    • The emerging life insurance industry in sub-Saharan Africa offers many opportunities for expansion.
    • The emerging middle class represents a valuable pool of potential new policyholders.

    Threats

    • Economic policy uncertainty, recessionary pressures and the escalation of socio-political tensions.
    • Heightened geopolitical tensions.
    • Nationalisation of the life insurance sector.
    • Over-regulation, the high cost of regulatory compliance and new minimum capital requirements could force small companies out of business.
    • Regulatory changes, together with technology-driven disruption are expected to further undermine the role of the insurance broker.
    • The high level of insurance fraud.
    • The industry is highly exposed to the volatility of both local and global financial markets.
    • The rising cost of reinsurance.

    Outlook

    As a strongly capitalised sector, the South African life insurance industry is generally expected to remain resilient in the face of increased socio-economic challenges and political upheaval. However, while the industry’s major players are better positioned to withstand a prolonged downturn in the domestic economy, certain role players believe that many insurance brokers, as well as smaller insurance firms could be forced to close. Economic pressures are widely expected to drive up the policy lapse and surrender rates and, with the exception of new recurring premium savings business, analysts predict that new life insurance business will decline, as consumers endeavour to reduce their expenditure. Commentators warn that political tensions are set to intensify in South Africa in the run-up to the 2019 General Election and that the challenges currently facing life insurance companies, reinsurers and intermediaries are likely to be compounded by the new wave of complex and costly regulatory changes.

    The Life Insurance Industry in South Africa
    The Life Insurance Industry in South Africa 2017

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    The Life Insurance Industry in South Africa 2022-10-18

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    The Life Insurance Industry in South Africa 2015-12-02

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 3
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 4
    4. STATE OF THE INDUSTRY 9
    4.1. Local 9
    4.1.1. Corporate Actions 15
    4.1.2. Regulations 16
    4.1.3. Enterprise Development (ED) and Social Economic Development (SED) 21
    4.2. Continental 23
    4.3. International 26
    5. INFLUENCING FACTORS 27
    5.1. Economic Environment 27
    5.2. Socio-Economic Environment 29
    5.3. Rising Operational Costs 30
    5.4. Technology, Research & Development (R&D) and Innovation 30
    5.5. Labour Resources 33
    5.6. Cyclicality 35
    5.7. Environmental Concerns 36
    5.8. Over-regulation 36
    5.9. Fraud 37
    6. COMPETITION 38
    6.1. Barriers to Entry 39
    7. SWOT ANALYSIS 40
    8. OUTLOOK 41
    9. INDUSTRY ASSOCIATIONS 41
    10. REFERENCES 43
    10.1. Publications 43
    10.2. Websites 44
    COMPANY PROFILES 46
    1 LIFE INSURANCE (RF) LTD 46
    ABSA LIFE LTD 49
    AFRICAN UNITY LIFE LTD 51
    AIG LIFE SOUTH AFRICA LTD 53
    ALEXANDER FORBES LTD 55
    ALLAN GRAY LIFE LTD 59
    ASSUPOL LIFE LTD 61
    AVBOB MUTUAL ASSURANCE SOCIETY 63
    BIDVEST LIFE LTD 66
    BOPHELO LIFE INSURANCE LTD 68
    BRIGHTROCK LIFE LTD 70
    CLIENTELE LIFE ASSURANCE COMPANY LTD 72
    COMMUNITY LIFE INSURANCE COMPANY LTD 74
    CORONATION LIFE ASSURANCE COMPANY LTD 75
    DISCOVERY LIFE LTD 77
    FEDGROUP LIFE LTD 79
    GENERAL REINSURANCE AFRICA LTD 81
    GIC RE SOUTH AFRICA LTD 84
    GUARDRISK LIFE LTD 86
    HANNOVER REINSURANCE GROUP AFRICA (PTY) LTD 88
    HOLLARD LIFE ASSURANCE COMPANY LTD 90
    INVESTMENT SOLUTIONS LTD 93
    LAND BANK LIFE INSURANCE COMPANY SOC LTD 96
    LIBERTY HOLDINGS LTD 98
    LION OF AFRICA LIFE ASSURANCE COMPANY LTD 102
    MMI GROUP LTD 105
    MUNICH REINSURANCE COMPANY OF AFRICA LTD 108
    NEDGROUP STRUCTURED LIFE LTD 110
    OLD MUTUAL LIFE ASSURANCE COMPANY (SOUTH AFRICA) LTD 112
    OUTSURANCE LIFE INSURANCE COMPANY LTD 116
    PROFESSIONAL PROVIDENT SOCIETY INSURANCE COMPANY LTD 118
    PRUDENTIAL PORTFOLIO MANAGERS (SOUTH AFRICA) LIFE LTD 121
    PSG KONSULT LTD 123
    RAND MUTUAL ASSURANCE COMPANY LTD (THE) 127
    REGENT LIFE ASSURANCE COMPANY LTD 131
    RGA REINSURANCE COMPANY OF SOUTH AFRICA LTD 134
    SANLAM LIFE INSURANCE LTD 137
    SCOR AFRICA LTD 143
    STANDARD GENERAL INSURANCE COMPANY LTD (THE) 145
    STRATEGIC INVESTMENT SERVICE LIFE COMPANY LTD 147
    SWISS RE LIFE AND HEALTH AFRICA LTD 148
    SYGNIA LIFE LTD 150
    UNION LIFE LTD 152

    Introduction

    This report focuses on the latest developments in South Africa’s life insurance industry. The industry, which falls under the long-term insurance umbrella, also encompasses reinsurance, as well as various other forms of long-term insurance involving the collection and investment of funds. With benefit payments of R366.8bn and assets of R2.3-trillion in the 12 months ended 30 June 2015, the long-term insurance industry is the custodian of a sizeable portion of South Africa’s long-term savings pool. Although the industry is well capitalised, it currently finds itself in a state of flux and some analysts warn that the decline in the growth of risk policies could impact negatively on the South African economy.

    Strengths

    • Governance and risk management are reputed to be of a high standard.
    • The industry is a significant contributor to the country’s savings pool.
    • The life insurance industry is highly competitive.
    • The South African life insurance and reinsurance industry is well capitalised, regulated and financially sound. It has proved to be resilient and stable during times of economic recession.

    Weaknesses

    • A life insurance culture is lacking in South Africa. Penetration of the market is low and, with the exception of funeral cover, the level of underinsurance is critically high.
    • Reinsurance capacity in the local market is limited.
    • Some pricing practices, such as those applicable to HIV-positive policyholders, are not risk-based.
    • The industry is constrained by over-regulation.
    • There is a lack of meaningful transformation in the industry.
    • There is a relatively low level of product differentiation and product development has not adequately addressed the needs of lower income earners.
    • There is a skills deficit in the sector.

    Opportunities

    • The advent of mobile insurance.
    • The development of affordable, client-centric insurance and micro-insurance products for South Africa’s largely uninsured or underinsured low-income earners.
    • The emerging life insurance industry in sub-Saharan Africa offers many opportunities for expansion.
    • The emerging middle class represents a valuable pool of potential new policyholders.

    Threats

    • Over-regulation, the high cost of regulatory compliance and new minimum capital requirements could force small companies out of business.
    • South Africa’s low growth rate, the prevailing weakness of the local currency and socio-political challenges.
    • The high level of fraud.
    • The industry is highly exposed to the volatility of both local and global financial markets.
    • The rising cost of reinsurance.

    Outlook

    Notwithstanding the reality that death remains one of the few certainties in life, life insurance is still widely regarded as a grudge purchase and an alarmingly high proportion of South Africa’s population remains uninsured or underinsured. Many stakeholders have reiterated that the development of affordable insurance and micro-insurance products for low-income earners ought to be prioritised. They warn 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.\r\n\r\nWith the implementation date of the ‘Twin Peaks’ Regulatory Model and the SAM regulations rapidly drawing nearer, smaller players in the insurance industry face the risk of being swept away by the so-called ‘regulatory tsunami’. Analysts warn that the implementation of the stringent measures, coupled with the high cost of regulatory compliance, is likely to place upward pressure on insurance premiums. The industry is also facing major disruptions as it grapples with the rapid pace of technological development.

    The Life Insurance Industry in South Africa
    The Life Insurance Industry in South Africa 2015

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    The Life Insurance Industry in South africa 2024-06-13

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    The Life Insurance Industry in South Africa 2022-10-18

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    The Life Insurance Industry in South Africa 2021-01-18

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    The Life Insurance Industry in South Africa 2019-01-31

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    The Life Insurance Industry in South Africa 2017-05-22

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 3
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 4
    4. STATE OF THE INDUSTRY 8
    4.1. Local 8
    4.1.1. Corporate Actions 11
    4.1.2. Regulations 14
    4.1.3. Enterprise Development (ED) and Socio-Economic Development (SED) Initiatives 18
    4.2. Continental 21
    4.3. International 22
    5. INFLUENCING FACTORS 24
    5.1. Economic Environment 24
    5.2. Socio-Economic Environment 25
    5.3. Input Costs 26
    5.4. Technology 26
    5.5. Research and Development (R&D) 27
    5.6. Innovation 27
    5.7. Labour Resources 28
    5.8. Cyclicality 30
    5.9. Environmental Concerns 31
    5.10. Over-Regulation 31
    5.11. Fraud 31
    6. COMPETITION 32
    6.1. Barriers to Entry 33
    7. SWOT ANALYSIS 34
    8. OUTLOOK 35
    9. INDUSTRY ASSOCIATIONS 35
    10. REFERENCES 36
    10.1. Publications 36
    10.2. Websites 37
    COMPANY PROFILES 39
    1LIFE INSURANCE (RF) LTD 39
    ABSA LIFE LTD 41
    AFRICAN UNITY INSURANCE LTD 43
    AIG LIFE SOUTH AFRICA LTD 45
    ALEXANDER FORBES LTD 47
    ALLAN GRAY LIFE LTD 51
    ASSUPOL LIFE LTD 53
    AVBOB MUTUAL ASSURANCE SOCIETY 55
    BIDVEST LIFE LTD 57
    BOPHELO LIFE INSURANCE ADMINISTRATORS (PTY) LTD 59
    BRIGHTROCK LIFE LTD 60
    CLIENTELE LIFE ASSURANCE COMPANY LTD 62
    COMMUNITY LIFE INSURANCE COMPANY LTD 64
    CORONATION LIFE ASSURANCE COMPANY LTD 65
    DISCOVERY LIFE LTD 67
    FEDGROUP LIFE LTD 70
    GENERAL REINSURANCE AFRICA LTD 72
    GIC RE SOUTH AFRICA LTD 74
    GUARDRISK LIFE LTD 76
    HANNOVER REINSURANCE GROUP AFRICA (PTY) LTD 78
    HOLLARD LIFE ASSURANCE COMPANY LTD 80
    INVESTEC ASSURANCE LTD 83
    INVESTMENT SOLUTIONS LTD 84
    LAND BANK LIFE INSURANCE COMPANY SOC LTD 87
    LIBERTY HOLDINGS LTD 89
    LION OF AFRICA LIFE ASSURANCE COMPANY LTD 93
    MMI GROUP LTD 95
    MUNICH REINSURANCE COMPANY OF AFRICA LTD 98
    NEDGROUP STRUCTURED LIFE LTD 100
    OLD MUTUAL LIFE ASSURANCE COMPANY (SOUTH AFRICA) LTD 102
    OUTSURANCE LIFE INSURANCE COMPANY LTD 106
    PROFESSIONAL PROVIDENT SOCIETY INSURANCE COMPANY LTD 108
    PRUDENTIAL PORTFOLIO MANAGERS (SOUTH AFRICA) LIFE LTD 111
    PSG ASSET MANAGEMENT HOLDINGS (PTY) LTD 113
    RAND MUTUAL ASSURANCE COMPANY LTD (THE) 115
    REGENT LIFE ASSURANCE COMPANY LTD 119
    RGA REINSURANCE COMPANY OF SOUTH AFRICA LTD 122
    SANLAM LIFE INSURANCE LTD 124
    SCOR AFRICA LTD 129
    STANDARD GENERAL INSURANCE COMPANY LTD (THE) 131
    STRATEGIC INVESTMENT SERVICE LIFE COMPANY LTD 134
    SWISS RE LIFE AND HEALTH AFRICA LTD 135
    SYGNIA LIFE LTD 137
    UNION LIFE LTD 139

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