The Life Insurance Industry in South Africa in South Africa 2022

Introduction

The life insurance industry remained profitable and well capitalised despite record high claim payouts in 2021. The industry’s total income and profit increased in 2021 compared to 2019 and 2020. COVID-19 made people more aware of risks, causing higher demand for life insurance products. Africa is a key long-term growth market for insurance, providing opportunities for local life insurance companies.

The industry’s growth is affected by the weak economy, unemployment and inflation that are reducing disposable income.

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.

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.

Premiums are forecast to increase in 2023. 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. The local market is expected to shrink over the next year due to decreasing disposable income. A higher death rate than before the pandemic is expected over the next few years due to delayed or missed treatments for serious conditions.

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.

Strengths

Large number of well-established companies.

The industry is highly competitive, well capitalised and financially sound.

Threats

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

Insurtech companies.

Weaknesses

Shortage of skills, especially technology skills.