No blanket increases for Santam policy holders

Santam policy holders will not be hit by blanket premium increases this year as SAs largest short-term insurer has been tackling the majority of their policyholders individual increases as and when policy renewals arise.

An increase in cars on the road, along with more accidents and infrastructure that has not kept pace with the increase of vehicles on our roads, are some of the reasons why motor policy holders, specifically, are experiencing hikes in premiums, says Lourens Joubert, Head of Commercial Underwriting at Santam.

"However, with these factors in mind, we always attempt to avoid blanket premium increases on insurance policies by carefully managing our profitability over time. This year we can safely say there will be no blanket increases for our policyholders, and that most of our best clients are not likely to receive any increases whatsoever. This applies across most of our insurance products.

"Instead, increases will be focused on those with bad claims track records, and those whose premiums may not have kept pace with the replacement and repair costs of their particular make of vehicle.

"Many insurers are being forced to implement 10-15% book-wide increases due to a loss of profitability on their motor policies. A portion of this loss must lie at the feet of the insurer who may have taken on risks at too low premium levels."

However, Joubert says much of the deterioration in industry profitability has been related to an increase in accidents and the increased costs of repairing accident damage.

"If you consider that there are an increasing number of new local and foreign cars on the roads, which incorporate more advanced and expensive technology, this, along with increasing repair costs, is impacting on the industry."

Joubert says policy holders living in densely populated city areas where congestion is higher, like Gauteng and Cape Town, were more likely to be involved in accidents and therefore there has been a higher density of premium increases in these areas when compared with the Free State, for example.

"But, obviously we analyse policies individually and those with favourable track-records, no matter where they are based, will receive lower or no increases at all."