The South African market insurance

Insurance market features

• Regulatory authority: Financial Services Board (FSB)
• Earned premiums (2001): 20.297 billion USD
• Insurance density: 464.5 USD
• Insurance penetration ratio: 18%

Market structure in 2001

• Number of insurance companies: 155 (Life : 67 / Non life : 88)
• Number of reinsurance companies: 13 (Life : 6 / Non life : 7)
• Life insurance: The eight main insurers, at their head Old Mutual and Santam, have received 80% of their 2001 total premiums.
• Non-life insurance: Santam and Mutual & Federal alone represent about 40% of the net premiums of the market. 86 other companies share the 60% left.
• Reinsurance: In 2001, 7 damage reinsurance and 6 life reinsurance companies were registered in South Africa with total assets of about 1.3 billion USD. Reinsurers' total gross premiums in 2001 amounted to 0.8 billion USD, that is, 0.3 billion USD for life insurance and 0.5 billion USD for IARD insurance.
  The market is dominated by branches of international groups, such as Hanover Re, Swiss Re, Munich Re, General Cologne and Gerling Global.

Identity

• Area: 1 222 000 Km²
• Population (2001): 43 700 000 inhabitants
• GDP (2001): 114.2 billion USD
• GDP per capita (2001): 2 613 USD
• GDP growth ratio (2001): 2.6%
• Inflation rate (2001): 5.8%
• Main economic sectors: Mining, chemicals, steelworks, textile, food products

Main cities

(in millions of inhabitant)

• Le Cap: 2.4
• Johannesburg: 1.9
• Durban: 1.1
• Pretoria: 1.1
• Port Elizabeth: 0.9

Regulation

• The Long Term Insurance Act for Life Insurance
• The Short Term Insurance Act for Damage Insurance.

The new provisions

• Several amendments to the Long Term Insurance Act were approved, following the application of the new regulation on commission fees on February 15, 2002.
• The Insurance Amendment Bill (2002) was approved by the government and published in the South African Official Journal in August 2002. The main amendment concerns life insurance and describes the method for companies to calculate insurers' assets and liabilities in order to guarantee their financial transparency.