The overall insurance industry has had a better-than-expected year – with strong gains in both the life and non-life sectors, according to KPMG South Africa’s annual South African Insurance Industry Survey for 2022, which was released yesterday.
Mark Danckwerts, partner: KPMG Africa insurance practice leader, said: “It is great to see in this year’s survey that the non-life and life insurers have bounced back nicely after the pandemic and have shown strong recovery at the top and bottom lines – creating a strong base from which the industry is able to enter what seems to be the end of the pandemic.”
In the non-life insurance industry – following the significant volumes and values of business interruption claims in 2020 because of the Covid-19 pandemic – the industry presented robust 2021 results, with the sector increasing profits by more than double the 2020 figures to R12.1 billion, the report found.
The industry reported gross written premiums (GWP) of R131.6bn, an increase of 7% from the prior year.
Meanwhile, KPMG found that for life insurance, in 2020, several life insurers reported having paid or accrued for more claims than ever before, resulting in an overall loss of R5bn.
“The life insurance industry has done well to return to profitability in 2021, reporting healthy profits of R17.1bn,” it said.
The Association for Savings and Investment South Africa reported a 17% increase in new individual recurring premium risk policies and a reduction of 28.8% in lapsed policies.
However, KPMG’s report said: “There is no doubt that the reinsurance industry bore the brunt of the loss events that occurred during 2020 and 2021.
“With GWP growth of only 1%, an 11% decline in investment income and underwriting losses from all surveyed reinsurers (R3.8bn), it is safe to say that the reinsurers did not recover well following Covid-19-related business interruption claims from non-life insurers and increased mortality experience by life insurers.“
BUSINESS REPORT