BrightRock sees resilience, growth, and improved claims experience in 2023

11 April 2024 BrightRock

Key performance indicators
• Total cover in force across its individual life and funeral businesses exceeds R395 billion, with total annualised premium income of more than R1.9 billion
• Total claims paid of more than R5.8 billion to date. This is across individual life, group risk, and funeral claims.
• BrightRock’s individual risk product gained market share (by premium) for new business written by independent financial advisers in 2023, increasing to 12.7% in 2023 from 11.2%, a 13.4% change from 2022, according to the NMG SA Risk Distribution Monitor.
*As at 31 December 2023

Needs-matched life insurer, BrightRock, today provided an update on its business performance results across its individual life and funeral businesses for the fiscal year ending 31 December 2023. Despite the difficult economic conditions currently impacting consumers’ pockets, CEO Schalk Malan says BrightRock has shown resilience and growth.

“The ongoing cost of living crisis and the fall-out of the COVID-19 pandemic has placed continued pressure on the life insurance industry in South Africa, which has seen higher-than-average claims experience and an increase in policy lapses over the past four years,” he said. Citing statistics released by the Association of Savings and Investments (ASISA), he says South African life insurers paid out more than R599 billion to beneficiaries in 2023, demonstrating the industry’s impact.

“Amid these challenging conditions, BrightRock has remained resilient. We’ve seen growth in market share over the past year, along with an increase in our average premium per policy, while our lapse experience has remained lower than expected. These are all positive signs that BrightRock remains well positioned to grow in the intermediated individual risk market, where we distribute our individual risk offering through independent financial advisers (IFAs)”.

A highlight of the period has been BrightRock’s claims performance, which, according to Malan, is the most important measure of how well a life insurer is performing for its clients.

“Since our inception twelve years ago, BrightRock has paid over R5.8 billion in claims. We are proud of our ability to pay claims, and are focused on providing clients with certainty of payment. In fact, we often pay claims that other providers in the market may not have paid, or the value of pay-out received by BrightRock clients in many instances far exceeds what clients would have received with any other provider in the market.”

According to Malan, BrightRock’s claims performance in favour of clients is one of the drivers of its excellent record with the Long-term Insurance Ombudsman’s office. BrightRock, on average, receives far fewer complaints than other providers in the industry and the number of findings against BrightRock has been very low. In 2023, for example, the industry average for Ombud findings in favour of the client was 26%, while BrightRock’s rate was 13%, indicating that in the majority of complaints, the Ombud’s office upheld the fairness of BrightRock’s decisionmaking. This is according to BrightRock’s own records, the Ombudsmand’s annual report has not yet been released.

Efficiency, value, and certainty for clients
Malan also highlighted BrightRock’s premium efficiency and certainty for clients. The latest Swiss Re new business volumes survey shows that, while BrightRock was again ranked first by sum assured in the intermediated IFA individual life market in 2022, with 12.1% of the overall cover purchased in the market placed with BrightRock, it received only 9.9% of the premiums in this same market, demonstrating that BrightRock clients received around 22% more cover, on average, for their premium rand with BrightRock than with any other provider.

He cites BrightRock’s premium increases as another example of the value the needs-matched life insurer has been delivering to clients since inception.

“BrightRock’s first group of policies reached their 10th anniversary in 2022, which marked the end of the 10-year premium guarantee period for these clients. During a guarantee period, insurers may not increase their premiums by more than the guaranteed amount. At the end of the period, insurers have the right to increase premiums to compensate for higher than expected claims experience, increases in inflation and other factors. BrightRock has not increased premiums and has, in fact, guaranteed our clients’ premiums for a further 10-year period, for all three years of maturing clients” he said, this is even more powerful when considering that BrightRock always guarantees the entire premium increase percentage during this guarantee period- unfortunately not the case with many traditional providers.

Malan says this is due to the sustainability and accuracy of BrightRock’s pricing methodologies, and its commitment to placing clients in the best possible position. He points out that some other providers in the market have opted either to reduce their guarantee periods, not guarantee the full increase during this period,or to review premiums annually after an initial guarantee period.

Speaking about last year’s announcement that Sanlam would increase its stake in BrightRock to 100%, Malan says that the transaction was successfully concluded in 2023, and has helped to position BrightRock strongly for the future. "Sanlam has been an amazing investor and partner to BrightRock and the transition has really been seamless. With their full backing and support, we’re positioned strongly to keep growing and meeting our clients’ needs”.

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