Economic Fears Grip SA Life Insurance Industry |
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February 21 - Fear of an economic slowdown in South Africa has taken hold of the local life insurance industry, as a result of rising interest rates, a shrinking lending market, and more stringent regulations governing insurance intermediary commissions. According to Andre Dreyer, business development actuary for RGA Reinsurance Company, South Africa's life insurance industry is preparing for a further tightening cycle due to the above factors, coupled with recent fears of decreasing economic growth as a result of SA's electricity supply issues. 'The SA life insurance industry will be severely impacted by a recession when disposable income decreases in many South African households. This will result in monthly life insurance premiums being eliminated from many household budgets. Plus, new life business sales will also decrease', Dreyer explained. Dreyer also speculated that life insurance claims experience could also start to deteriorate. This would be as a result of price cross-subsidies being laid bare when the balance of risks in an insurance portfolio changes, as higher lapses may not necessarily be experienced across the board. 'We could also expect a rise in fraudulent life insurance claims, as times of recession invariably results in an increase in disability claims,' he said. Related Insurance Articles: * Liberty Group enters East African Market * Nelson Mandela Bay Residents Say No to Water Leak Insurance * Zimele Initiative Needs More Hype Injected Says Insurance Industry * New Commission Rules For Life Insurers * Former Santam CEO to head up Old Mutual Asia * SanlamConnect Building Financial Relationships * French Reinsurance Company Arrives in SA * Santam Offers Clients Risk Management Service 
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| 3/14/2010 7:05:39 AM | |||||||||||||||||||||
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