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Just Retirement launches enhanced retirement product in SA

13 August 2015 Deane Moore, Just Retirement South Africa

An experienced local team has founded Just Retirement South Africa, a subsidiary of the UK-listed Just Retirement Group, and has launched a product designed to increase the retirement income of those who need it most. The biggest winners are likely to be those in the low to middle income segments, and anyone with medical conditions or lifestyle factors that may shorten their life expectancy.

“We expect around two in five retirees to be able to increase their guaranteed retirement income by between 10% and 30% with our enhanced annuities,” says Deane Moore, the local CEO. “By asking customers a few lifestyle and medical questions, we are able to price fairly for their individual circumstances without requiring a medical examination.”

Enhanced annuities are a relatively new concept for South Africa, but are well established in the UK. Just Retirement is fully operational and is in the process of rolling out a range of products designed for the South African market, combining local management’s knowledge of the market with the scale and expertise of the international group in this area.

Moore believes the company’s entry into the South African market is well timed, as its objectives and offerings support both the treating customers fairly initiatives being introduced by the Financial Services Board and National Treasury’s retirement reform initiatives. Enhanced annuities specifically address the issue raised in National Treasury’s Draft Regulations and Explanatory memorandum released last week, namely that “life annuities…appear to be expensive…for those who have shorter life expectancy, such as the poor or those who are in ill health.”

Moore, who designed South Africa’s first inflation-linked annuity, leads a local executive management team with a collective 160 years of experience in financial services. Peter Doyle, a previous CEO of Metropolitan Life and past president of the Actuarial Society of South Africa, chairs the Board, while Herman Wessels, previously a lead auditor of insurance companies for PricewaterhouseCoopers, chairs the Audit and Risk Committee.

The South African insurance industry has relatively little experience in writing guaranteed annuities. According to statistics from the Association for Savings and Investment South Africa (ASISA), the aggregate amount written by all life insurers operating in SA in 2014 was R5bn. By comparison, the Just Retirement Group wrote R24bn of annuities that provide a guaranteed income for life, all of which were enhanced annuities.

“We believe everyone deserves a just retirement, which means good value for money for their retirement savings and fair treatment,” says Moore.

Rodney Cook, CEO of Just Retirement Group says, “Our comprehensive longevity research has enabled us to provide higher retirement incomes to over 150,000 customers in the UK and we look forward to being able to benefit retirees in South Africa in a similar way.”

 

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