Insurance
From The Report: South Africa 2013
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As the continent’s most developed insurance sector, South Africa accounts for some 52% of African non-life premiums. The short-term insurance market is primarily focused on property and auto products, which together make up almost 75% of short-term gross premiums. Speedy growth in the number of independent insurers has created a robust takeover environment for the major insurers. However, the bulk of the sector is concentrated in the hands of the “big four” insurers. Insurers looking for growth opportunities are increasingly targeting low-income groups through micro-agents and retailers.
This chapter contains a roundtable with Bruce Hemphill, CEO, Liberty Group; Nicolaas Kruger, Group CEO, MMI Holdings; Ralph Mupita, CEO, Old Mutual Emerging Markets; and Johan van Zyl, Group CEO, Sanlam.

Articles from this Chapter

Overview

Plenty of ambition: Opportunities exist to scale up expansion in Africa and scale down policies to attract lower-income clients
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As the continent’s most developed insurance sector, South Africa’s insurance market accounts for some 52% of African non-life premiums. It presents fundamentals for significant growth in coming years, with insurance penetration of some 12.9%, according to global accountancy PwC. The domestic life and non-life segments rank 13th and 19th in size globally, with net premiums of R151.67bn ($18.49bn) and R35.58bn ($4.34bn) in the first three quarters of 2012, respectively, according to PwC. Heavily…

Interview

OBG talks to Bruce Hemphill, CEO, Liberty Group; Nicolaas Kruger, Group CEO, MMI Holdings; Ralph Mupita, CEO, Old Mutual Emerging Markets; and Johan van Zyl, Group CEO, Sanlam
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Interview:Bruce Hemphill,Nicolaas Kruger,Ralph Mupita,Johan van Zyl How is the regulatory environment developing and what are the prospects of a twin peaks approach? BRUCE HEMPHILL: The movement toward a twin peaks regulatory approach, where the Financial Services Board regulates all of the interactions customers have with financial services organisations, while the South African Reserve Bank focuses on the prudential capital side of things, certainly makes a huge amount…

Analysis

Retirement funds: Reform of the continent’s largest pension industry brings opportunity
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Amidst a period of market-led consolidation, the continent’s largest pension industry is now facing the prospect of wholesale reform of South Africa’s social security system. While the fiscal implications remain unclear, more inclusive retirement coverage has emerged as a key government priority, alongside health insurance reform (see Health chapter). With a move towards a twin regulatory structure with stricter control of market practice and the prospects of further consolidation into larger,…

Analysis

Regulatory changes: The authorities look to tighten rules of the game to boost market oversight
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The Treasury’s wide-ranging financial reform over the next three years will affect South Africa’s insurance sector in at least three distinct ways. Four key objectives have defined the reforms of the financial sector: preserving financial stability, ensuring consumer protection and fair market conduct, extending financial inclusion and cracking down on financial crime. Amidst the move towards a “twin-peaks” regulatory structure, where responsibility for prudential regulation will be transferred…

Analysis

Expanding distribution: New partnerships open up access to untapped market segments
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While agents and brokers have traditionally formed the key distribution channel for both short- and long-term insurance, a rapid shift in distribution mixes has unsettled traditionally fixed market shares. As newer and smaller direct insurers have gained significant market share in the past six years, in personal motor and property lines particularly, South Africa’s largest insurers have reacted by launching their own direct channels. Where direct insurers have not proved so successful, in long-term…