Climate change, infrastructure concerns and socio-economic challenges have created a tough environment for local insurers and global reinsurers. Short-term insurance companies not only have a responsibility to ensure that their businesses remain strong and are able to sustainably withstand the cost of the risks that are currently dominating the landscape. They have a responsibility to ensure the financial wellbeing of clients and communities is protected against risks such as the increased frequency and severity of severe weather events, among others.

The 2023 report was conducted against the backdrop of the rising frequency and severity of natural catastrophe losses, unprecedented levels of inflation and the soaring cost of repairs due to a fluctuating currency. In the years since our last Insurance Barometer Report, it has become clear that South African insurers are no longer insulated from the global natural catastrophe experience of the Asia-Pacific, Europe, and the United States of America. The growing number of large catastrophe reinsurance claims locally, coupled with rising global losses, has caused reinsurance premiums to increase significantly, with a knock-on effect on South African client premiums.

The report findings emphasise that apart from managing and adapting to new and enhanced risks, it is critical for the industry to look to the future. The best way to do that is to embrace technology; this means insurers must leverage their digital innovation offerings to reach and cater to a growing, diverse market. This inclusive approach will drive insurance adoption and shift the dial on financial inclusion.

Report by Santam