KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL
FANews
FANews
RELATED CATEGORIES

The state of the motor insurance industry in SA - 2006

27 February 2006 Lynette Lambert

According to leading South African insurers, not much change is expected for 2006 in respect of cover, limits and deductibles.

However, they do believe that capacity is beginning to reduce as insurers / reinsurers are becoming more sceptical about Motor as a profitable class of insurance, presumably this is based on the adverse underwriting results reported towards the end of 2005, which was mainly due to the rising costs of repairs in the motor industry, says Diann Johnson, a senior broker at Alexander Forbes Risk Services.

Johnson says that in 2006, insurers will be faced with the challenges of defending their current market share and growing their book of business in terms of this class of insurance, while still maintaining underwriting disciplines in order to focus on profitability.

Insurers have predicted that during 2006, we should expect to see a levelling off in rates where they will provide terms on an as expiring basis rather than the reduced rates which we saw during 2005, says Johnson.  Some insurers feel that, if they do not see some increases in rates soon, the premium reductions experienced during 2005 will disappear altogether during 2006.

An overall decline in hi-jacking and theft of motor vehicles over the past few years, resulted in competitive rates during 2005.  Any increased premiums during 2005 were mainly due to client-specific adverse claims experience.

"With regard to 1 January 2006 renewals, insurers remained very competitive.  They are still prepared to provide increased limits while deductibles remained flexible. However, they moved away from a percentage-of-claim deductible to a fixed-figure basis.  Insurers are also still keen to provide cover on a retail value basis," says Johnson.

 

Quick Polls

QUESTION

We have watched with interest as each of the country’s large life insurers report their 2021 life claims statistics, with soaring claims and claims values. That got us thinking: how do the big life insurers compare against one another, from an IFA perspective?

ANSWER

An insurer is an insurer is an insurer
All are excellent: would not deal with them otherwise
There is one insurance brand that stands out for me
Tied agent: but my brand is the best out there
fanews magazine
FAnews June 2022 Get the latest issue of FAnews

This month's headlines

A free smoothie does not make a loyal customer
Consequential loss policy court cases
Everything you need to know about death, disability and severe illness cover post-emigration
Are advisers doing all they can for clients’ portfolios?
Financial advisers need help - navigating the complex ESG fund environment
Subscribe now