By: Donald Makhafola
Giving global insurance market update at the recent IIG training seminar in Johannesburg, Guy Royston, head of specialties at Marsh Africa said the insurance market remains competitive in the world. He said global insurance rates in property coverage lines continue to decline at a great pace when compared to other lines of business.
In the US insurance market, cyber liability risk increases, according to the Global Risk Report 2017. The report also indicates that environmental threats feature strong among the most damaging risks according to the survey respondents. Cyber insurance increased between 25% to 35% per annum for the past four years. Average cyber rates continue to increase but at a declining rate.
Guy said investment risks can be alleviated by better aligning corporate strategic ambitions with political agendas and backloading investment where possible while making creative use of risk transfer facilities.
Matthew Perine from S&P Global Ratings said South Africa’s insurance industry continues to be resilient despite the slow growth. “We view South Africa’s insurance to be robust when compared to the country’s economy.” Perine said corporate confidence remain low in the country but he was adamant that there will be growth in speciality lines in the South African insurance market.
Giving a regulatory update, Christine Rodrigues from Aon SA explained why the industry needs new regulation as the industry keeps changing. She said the purpose of regulation is for firms to improve their conduct, corporate governance and to encourage fair competition. Rodrigues said the Insurance Bill has gone back to the parliamentary committee because it does not deal adequately with the issues of transformation in the country and it also needs to balance financial stability, without creating barriers to entry for new entrants. She said once the Insurance Bill is promulgated, it will replace all the prudential sections in the current LTIA and STIA. In addition, she said regulations need to change in order to change the market and to be aligned with the international trends. She further advised insurers that there is a massive untapped insurance market where there is potential to sell on non-advice or low advice products.