South Africa Insurance Report Q4 2016
OREANDA-NEWS. RnR Market Research Offers Report by Research on South Africa Insurance Report Q4 2016.
BMI View: The outlook for South Africa's insurance market is broadly positive. The market is home to both large and well capitalised domestic providers and major multinationals which ensures that the product offering, particularly in the larger life sector, is diverse and comprehensive. While the non-life sector remains dominated by basic motor and property lines, we are also seeing positive growth in demand for health and personal accident insurance, a trend we expect will gather pace over the medium term.
Downside risk does stem from South Africa's economic outlook, with both household and government expenditure expected to come under significant pressure.
Key Updates And Forecasts
- Following the announcement earlier in the year that Zurich planned to exit the market, the group confirmed in July 2016 that it agreed a sale of its holdings in South Africa and Botswana to Fairfax Financial Holdings Limited.
- At present we are broadly maintaining our short-term forecasts for South Africa's large life insurance segment. Premiums are forecast to grow by 6.9% in ZAR terms in 2016 to reach ZAR499.6bn. The weakness of the rand against the strengthening dollar means this will translate to a fall of 12.7% in US dollar terms to USD31.9bn.