There are serious indications to suggest that the insurance industry in Africa and in particular South Africa are being transformed, according to KPMG’s South African Insurance Survey 2015.
The survey says, some of the changes in South Africa’s insurance sector have been as a result of regulatory and accounting changes.
It adds that the sector remains concerned about GDP growth and high unemployment. Raimund Snyders, Mutual & Federal’s chief executive officer told CNBC Africa that South Africa’s insurance industry was under pressure just like the rest of the economy.
“The insurance industry in a developed insurance market grows with the economy and it is unlikely that one will see the sector growing outside of the growth trend of the economy,” Snyders told CNBC Africa.
He added that, when the economy is under pressure one way of remaining afloat is staying closer to the customers and being efficient.
The report also says the global risk landscape was marred by political conflict in both emerging and developed markets. It adds that this had its own upside challenges.
“Investing in these markets or other developing markets can offer great opportunities if you are able to effectively manage your exposure to the prevailing political risks,” said the report.
Political risks prevalent in emerging economies presented opportunities for actors in this space.“The underwriting of political risk insurance, locally and internationally, is a dynamic and growing business.
The challenges faced by business today are fundamentally different to those 20-30 years ago. Current worldwide events highlight the growing need for political risk insurance globally,” added the report.