On the other hand, as governments pull back from providing pensions and the retirement savings gap grows, insurers can develop new products to … However, in South Africa, the results of the Accenture’s 2017 Innovation Index show that we have not yet as a nation embraced innovation. According to Baker McKenzie’s Global Transaction Forecast, produced in conjunction with Oxford Economics, South Africa’s M&A market will remain weak in the near-term, with the projected strengthening of the economy in 2020-21 likely to support a modest recovery in deal-making activity in future years. Motor insurers take note: Replacement parts cannot compromise an insured’s safety! “Trough ClimateWise, Santam will now have a voice at the UN climate change negotiations in Copenhagen in December 09,” Kirk said. The cost of defending your enterprise network is not a child’s play. In 2020, the South African economy recorded its most significant decline in annual economic activity since 1946. What about our booze and tobacco! The mass retirement of baby boomers will challenge the balance sheets of life and health insurers in particular. Some have led to serious losses while other have led to complete closure of upcoming and existing companies. Kirk delivered the key note address at The Insurance Institute of South Africa’s (IISA) annual conference held at Sun City in the Pilansberg over the past weekend. If we don’t turn that around rapidly, the consequences will be dire. Short-term insurance industry results. © 2020 - Africa Communications Media Group - All rights reserved.Built with love in Africa | ContraMedia, Reputation Management and Public Relations, Thought Leader Positioning and Strategic Events, Media Relations and Press Release Distribution, https://africacommunicationsgroup.com/wp-content/uploads/2018/10/ACG_Slideshow_1min.mp4, Four Challenges Facing Insurance Companies – And How Effective PR Can Help, Changing Gender Dynamics In The African Workplace, How To Drive Thought-Leadership Through Impactful Content. As a society we need to reduce and attempt to avoid catastrophes in the longer term. We have compiled a list of 5 challenges South African Freight Industry are facing: 1. When we compare the country’s insurance penetration to economies like Kenya and South Africa which boast of insurance penetrations of 2.9% and 14% respectively, we see a clear lag. Challenges facing the South African Mining Industry by Prof Cyril O’Connor. Opportunities. Closer to home, the economic outlook for South Africa is also troubling. Mining companies must submit their Mining Charter compliance reports by 31 March 2020 showing how they are meeting any new requirements imposed on them in terms of the Mining Charter, 2018. Tractor sales still strong, combine harvesters take a dip New tractor sales continued their strong trajectory nationwide during February, a trend which … This was the message from Ian Kirk, Chief Executive of SA’s leading short-term insurance company, Santam. We work with governments, world-class academics and industry specialists, and we share ideas and expertise with partners inside and beyond the energy sector to drive innovation forward. Kirk announced that Santam had joined ClimateWise, a global insurance industry initiative aimed at influencing debate and decision-making on climate change which the industry sees as a critical global challenge. We will be working with them and the rest of the industry players to address the risks, share the opportunities and update our clients on our concerns around climate change.”, “A few years ago the focus was only on managing the risk – it’s now on influencing the risk so as to proactively decrease it. 6) More Catastrophic Events. Cost of Petrol. Not only are we as the industry facing a subdued growth outlook over the next two years, but we are facing considerable increases in claims, costs and frequency. Insurance companies need to understand that doing business using legacy systems which have varying levels of security is tantamount to their business. Five key challenges facing the insurance industry By Roi Agababa 02 October 2018 A buoyant stock market and a positive outlook for the US economy bode well for the insurance sector. Since our last survey, the insurance industry has quickly recovered after experiencing difficulties precipitated by … THE CHALLENGES OF THE NIGERIAN INSURANCE INDUSTRY ... to the 3.8 Billion United States Dollars collected in South Africa. The South African short-term insurance market, by comparison, increased by a robust 4.8% in insurance premium volumes, between 2017 and 2018. Insurance is facing more disruption than any other industry, ... industry would look like by 2020. Insurers have to do diligent research and study on cyber criminality and also have to reinforce their own systems to remain resilient. Despite the low growth in 2017, insurance premium volumes increased by 17.8% between 2016 and 2017, and the potential exists for Short-term Insurance providers to significantly increase their gross premiums by 2020. The level of risk often correlates directly with the economic health of the country and this is where the industry should ensure that it engages with policy makers. As an industry we can, and should, influence and bring about significant change to ensure the long-term sustainability of our industry.”, KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATION. South Africa faces key challenges such as poverty, low levels of education and employment, as well as an urgent need for economic growth. We believe every small act is important, as it all adds up and we are keen to learn from like-minded peers in the ClimateWise group. A demanding future. The ever-rising price of petrol in South Africa has taken its toll on hundreds of South African businesses, one being the freight industry. Businesses are facing a number of major challenges as we start 2020: Global growth is slowing, Middle East tensions are rising and concerns about trade remain. Against the background of South Africa’s first recession in 17 years and the increasing socio-economic challenges the country faces such as the high levels of personal debt and security concerns, the local short-term insurance industry is facing a testing time. Increase your staff productivity so as to restore consumer confidence and on an ongoing basis reassess the buying factors of your segmented customer base. This shift is manifesting itself in major – and disruptive – trends in four areas: product design, pricing and underwriting, distribution and administration, and claims management, with leading insurers already playing a frontrunner role in driving their adoption. Challenges facing insurance industry in Kenya and their possible solutions. We at Santam are therefore serious about our journey. But now, insurance ecosystems are upending many of these long-held assumptions. ... South Africa, Mexico, and Australia. The account holder has the … In 2015, South Africa dominated the non-life insurance industry in Africa, while Morocco was … The South African economy grew by 1.4% in the fourth quarter of 2018, contributing to an overall growth rate of 0.8% for the entire year. Cyber risk is something that cannot be fully mitigated but can be prevented as hackers are always moving and adapting much quicker than the defenses on ground. The insurance industry especially in Africa has generally been slow to adopt new digital approaches, but times are now changing. 3 However, despite these challenges, the industry may yet rebound to 3% growth in 2021, led by a potential 7% boost in emerging regions (figure 1). Against the background of South Africa’s first recession in 17 years and the increasing socio-economic challenges the country faces such as the high levels of personal debt and security concerns, the local short-term insurance industry is facing a testing time. African Analysis forecasts that the IoT installed base in South Africa will reach 35 million by 2020. Kirk emphasised that the industry is operating in very difficult underwriting conditions and that a new way of thinking is required. For additional information, please check out our white paper: PoPI Challenges and Solutions for South African Insurers. What’s interesting to note is the pivotal role that public relations (PR) and strategic communication play when it comes to overcoming many of these challenges. In an attempt to ascertain the reasons behind the Industry’s low penetration, Agusto & Co concluded a retail consumer survey on insurance in January 2017. Higher sin taxes. The insurance industry stands on the precipice of profound change. Our ideas drew on interviews with more than a thousand executives worldwide. The challenges faced by the industry should however be addressed through a collaborative approach with consumers, government and … “Climate change cannot be ignored or avoided and there are limits as to how much of the climate risk can be transferred to the insurance industry. And this disruption is not just digital. Despite the progress, South Africa is still committed to finding better ways of increasing customers’ access to financial services. … It examines the difficulties facing insurers on the road towards full PoPI compliance, as well as some opportunities that will likely result from the regulations, and how insurers can maximise those opportunities. Merger and acquisition value in South Africa was US$10.1 billion in 2019, but is expected to drop to $5.2 billion in 2020… Prof Cyril O’Connor’s presented the 2016 Academy Lecture, “Challenges facing the South African mining industry”, in October 2016 in Cape Town and in March 2017 in Gauteng. “Collaboration on risk management will be a key trend in the future. Demanding customers, new competitors and a changing set of challenges are transforming the insurance industry. Commercial and personal lines policyholders are under financial pressure and accordingly it is difficult for insurers to appropriate premium for the risk on the ground. While many industries are feeling the burn due to South Africa’s current economic climate, insurance companies in particular face a range of challenges within the consumer services market. Low insurance uptake in Africa can be attributed to the low income levels. In 2018, South Africa entered its second recession since the early 1990s. The four trends that define insurance in 2020. 4 FNA VS Compliance: Advisers still tripping up on section 8(1) of the Code! A MyWORLD account allows shared banking between customers and offers the cheapest transaction costs in South Africa. The industry often requires a long term view, considering long-tail risks, policies that can last a lifetime, and the need to build and maintain historic knowledge and project results far into the future. The insurance industry is still going through a period of change driven by a number of factors, as shown in Figure 1 – a few of which are worth discussing in detail. “For the insurance industry to that grow and flourish in the future, it is necessary to work with all stakeholders – government, the regulator, the wider community and its clients - to pro-actively manage risk on all levels,” he said. Given the pandemic’s impact on employment, business activity, and trade, global nonlife premiums are expected to be flat for full-year 2020, including a 1% decline in advanced markets. To do this, we need to understand the problems our markets face, promote loss prevention on all levels, align our business terms with risk reducing behaviour and ultimately craft new insurance solutions.”, In conclusion Kirk added the following as general advice to the industry, “Cut costs, but not quality. Local insurers and insurance brokers face numerous challenges including increasing competition, cost pressures due to compliance with regulation, and … This is being challenged by the Minerals Council of South Africa, along with other sections that are expected to be set aside. In South Africa, the insurance industry … Increased smoking laws, high tax rates and high input costs are slowing the demand for tobacco. Like every other industry, there are challenges facing the insurance industry in Kenya whose solving would definitely take the industry a leap higher. The broker’s dilemma: Courts lambaste non-life insures for business interruption shortcomings, Leading experts warn the world about the dangers ahead, The world of work 2021… smarter, faster, simpler, Trends that will shape the life insurance industry going forward, Advice for small financial advisors: Scale to rebound in 2021, Robo-advice the least of brokers’ concerns, Business valuations a priority this financial year-end, A risk-roadmap for greater broker intuition, The how-to guide for a productive "work from home" strategy, Statutory Bodies / Regulatory / Ombudsman, Certainly taxpayer-friendly, with tax increases being kept to a minimum, Realistic and in accordance with my expectation, Is welcomed news and will go a long way to bolster the economy and South Africa, I have mixed feelings… cutbacks and reprioritisations in government spending pose a significant risk and will come at a cost, Oh no!