Taking out long-term insurance should be a must, especially for “bread winners”, and deciding on which insurer to use is not quite the same as going into a store to buy a camera. It should be considered deeply as the well being of your family might depend on your final choice. The local long term insurance industry is, however, not where it could be…
In 2010, the 6th yearly report on long term insurance in South Africa was published. Most interesting was the fact that there was a marked decrease in net premium income for insurance companies because of three main factors:
1. More competition in the insurance industry
2. Decreased trust among plan holders
3. Low persistence
The most embarrassing issue for the insurance industry discovered above is that the public evidently has little confidence in their service providers. There is a need for more transparency in the industry to regain lost trust and to encourage new policy holders. The other two factors can be more easily remedied with extensive marketing and information dissemination.
Vulnerable Points in South Africa’s Insurance Industry
Technically, the weak points in the insurance industry in South Africa are nothing that can’t be fixed in a short period. These are like birthing pains for an industry that has barely gotten on its feet. However, that being said, the issues must be addressed immediately. The problems include: liquidity, management, the quality of assets, reinsurance, actuarial issues, and consumer response.
With more insurance companies starting to give South Africa a serious look, the government should firm up procedures to deal with the new competition, currency performance, renewal of policies, inflation, and interest rates. On the other hand, if you’re looking for property for sale in Paarl (to use an example), insuring that asset should be a priority that consumers must take responsibility for.
Life insurance has the usual coverage like disability, life, funeral, and critical illness coverage. There are many companies that offer cash back bonuses, customization, online marketing and booking, and links with sister insurance companies outside of South Africa.
How HIV /AIDS has Affected the Insurance Industry in South Africa
News about Africa and the HIV/AIDS problem has affected South Africa. Many are discriminated from being approved for life insurance because of exposure to the disease. It has caused a lot of stress among many South Africans over the past 20 years especially when major inroads have been successful in dealing with the spread of HIV/AIDS.
As of the first quarter of 2011, South Africa has 1.5 million people with HIV receiving treatment known as the antiretroviral (ARV) treatment. This should have turned into a golden opportunity for the insurance industry to be more positive about approving life insurance but it hasn’t. There is a market willing to invest in life insurance but with no one willing to provide it.
South Africa Is a Booming Economy
HIV and AIDS are no longer crowding the corridors of South Africa. The efforts from the global medical industry have ensured that the people infected have been attended to and the awareness about the spread of the virus has been country-wide.
However, HIV/AIDS is just a part of the greater conundrum that is the problem of long term insurance in South Africa. The people need to know what it’s all about and how they can live better lives. It has to get down to the grassroots level in order to be successful. At the same time, premiums can no longer be too expensive that life insurance is a luxury instead of a necessity.