Insurance
June 30, 2010
Industry backs state move on compulsory vehicle insurance
Linda Ensor
Business Day
The short-term insurance industry has welcomed a government initiative to explore the introduction of a compulsory motor vehicle insurance scheme. It said the underwriting of motor insurance by the private sector had become increasingly unsustainable because of the high number of accidents and the high number of uninsured vehicles on the roads. Only about 35% of the 8,5-million motor vehicles on the roads are insured, and the insurers of these vehicles have to bear the cost of damages caused by drivers of uninsured vehicles, pushing up premiums.
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June 07, 2010
Insurers adapt to clients’ needs by going mobile
Chantelle Benjamin
Business Day
Insurance companies are looking to mobile technologies and digital marketing in the future to get their product messages across, according to a global survey of 125 insurance firms by international management consultancy Accenture. Edmund Franklin, Insurance lead at Accenture SA, warns, however, that companies need to invest in a multichannel distribution network if they hope to get the attention of today’s consumers, who are using a variety of channels to get information. The survey found that for 85% of respondents, increased investment in multichannel distribution strategies planned by insurance companies over the next three years had a lot to do with efforts to branch out into new media.
May 07, 2010
New but older and wiser
Stephen Cranston
Financial Mail
This week the Old Mutual juggernaut has rolled out its new direct short-term insurance business, improbably named iWyze. The head of iWyze (pronounced eye wise), Willem Smith, concedes that direct insurance is already a crowded market. The big players are Telesure, funded by the maverick Douw Steyn in 1985, FirstRand’s Outsurance and Sanlam’s MiWay. Virgin Direct Insurance, underwritten by Telesure, was launched earlier this year. iWyze’s parent company, Mutual & Federal, has been losing market share to these operations for more than a decade.
April 30, 2010
That’s life: all complaints
Stephen Cranston
Financial Mail
The voluntary ombudsmen, for life insurance, short-term insurance and banking, do not have the statutory powers of the financial services ombud and the pension funds adjudicator (PFA). But they have the advantage that the subscribing members have agreed to abide by their decisions. This contrasts with the PFA, which has had its decisions taken to court regularly, particularly in 2005, at the peak of the retirement annuity controversy, when Vuyani Ngalwana was at the PFA. At times, the long-term insurance ombudsman was perceived to be too close to the life offices.
April 16, 2010
Anchors in a storm
Stephen Cranston
Financial Mail
The merger of Momentum with Metropolitan and the subsequent unbundling from FirstRand (Money & Investing April 9) will mean that the enlarged life insurer will have no parent company. But behind the scenes will be two large investment holding companies: RMB Holdings, with 18%, and Kagiso Trust Investments, with 9,5%. KTI is a shareholder in both Metropolitan (where it holds 20,6%) and FirstRand (where it holds an effective 2% through the FirstRand Empowerment Trust) and has been acting as a facilitator for the deal. Group MD JJ Njeke says he wants to see an unwinding of the discount at which Metropolitan trades to its embedded value.
April 01, 2010
Assurers shake up SA life industry with R30bn deal
Edward West
Business Day
FirstRand subsidiary Momentum and Metropolitan Holdings said yesterday they would merge to form SA’s third-largest life assurer with an expected market capitalisation of about R30bn. In what is arguably the biggest corporate deal in SA so far this year, the embedded value of Momentum was put at R18bn for the transaction, while Metropolitan’s was R12bn. This is a measure of the present value of future profit plus net asset value of a life assurance company.
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May 17, 2010
If your insurance company is not loyal to you, why be loyal to it?
Bryan Hirsch
Business Day
Whilst there is a belief in the insurance industry that being loyal to a company pays dividends over the long term, there is a significant difference between life insurance and short-term insurance companies. No loyalty towards the client exists within a life insurance company — you get what you pay for and there are no ex-gratia payments should your investments have underperformed. When it comes to a payout on death, the company is likely to repudiate the claim if they investigate and discover you failed to disclose material health issues.
May 02, 2010
Don’t bury relatives in funeral costs
Jane Steinacker
Business Times
There are two certainties in life, death and taxes, and while you have no control over either, you can certainly plan for the former. It seems that everyone has climbed onto the hearse, with multitudes of funeral plans or policies on offer in South Africa. Funerals aren’t getting any cheaper. A 2008 assessment by the funeral industry showed that the cost of a typical funeral starts at R8975. These costs include a standard coffin, a service fee, church fees, the cost of a grave and press notices. If you add the costs of transporting the body to the mourning family — from Cape Town to the Eastern Cape, in our example — this will add between R6000 – R8000 to the bill.
April 20, 2010
Profitability in life insurance expected to keep up strong growth
Staffer
Business Day
Profitability in the life insurance industry was expected to continue to grow at a strong pace in the second quarter, supported by investment income growth, according to a survey of the industry. A quarterly survey by Ernst & Young showed that confidence in the industry rose once again, albeit moderately, to 76 index points in the first quarter of this year from 71 points in the previous quarter. This means close on three quarters of SA’s life insurers were satisfied with business conditions in the period.
April 09, 2010
Leapfrogging competitors
Stafford Thomas
Financial Mail
Long-term insurance is protection many take for granted, yet for most people in SA and developing economies worldwide it remains an elusive expense. Andrew Kuper intends to correct this imbalance with the founding of LeapFrog, the world’s first private equity fund focused on microinsurers. “We should be reaching everyone, it can be done on a commercial basis and no-one should go without protection,” says Kuper. What Kuper terms a “profit-with-purpose investment proposition” has attracted major backers, enabling him and his largely SA team to raise US$110m in the first round of funding.
March 23, 2010
Insurer reports ‘leave investors in the dark’
Edward West
Business Day
A big gap exists between analyst expectations and the clarity and quality of financial reporting of SA’s insurance sector. Some believe the gap is affecting market values and the level of investment in the sector. This emerged from a PricewaterhouseCoopers (PwC) survey of seven South African insurance analysts in the first quarter of this year on the state of financial reporting in the insurance sector. The survey comes after a similar study by PwC globally in the fourth quarter last year.
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MORE ARTICLES:
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The blue and the green
March 19, 2010
Insurers hit the jackpot as market recovers
March 14, 2010
How much life insurance is enough to provide for your family’s needs?
March 08, 2010
Fighting their corner
February 12, 2010
Down to the die-hards
February 12, 2010
No-fault car accident insurance a step closer
February 04, 2010
Technology brings industry up to speed
January 29, 2010
Adding value changes role of the intermediary
January 29, 2010
Expert advice the key to containing risk
January 29, 2010
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