^{South African insurance industry is almost ‘out of the woods’ with better-than-expected outcomes!}

 

KPMG South Africa today launched its annual South African Insurance Industry Survey for 2021. Forty non-life insurers, 21 life insurers and seven reinsurers were surveyed. The results indicate that the South African insurance industry has been invaluable to the economy, serving as a shock absorber and allowing many businesses to recover.

 

“The contribution of the insurance industry to the stability and financial soundness of the South African economy demonstrates the capital strength, resilience, and ability of the industry to adapt, innovate and show up when it matters. We are very pleased at the results of this year’s survey which indicate that while the insurance sector was hit hard, it was resilient and adaptable,” says Mark Danckwerts, Partner: KPMG Africa insurance practice leader.

 

This year’s survey indicated a strong focus on risk management across key areas. One example is environmental risk. The insurance industry is highly affected by environmental changes and these risks and exposures should be identified, measured and responded to through governance, strategy, risk management, product offerings and related reporting. Corporate governance, market conduct, data privacy and cyber security breaches are all relevant ESG issues insurers are increasingly concerned about. However, although some insurers may have considered and potentially modelled pandemic type scenarios within their Own Risk and Solvency Assessment (ORSA) scenarios, few, if any, had adequately considered the linkages and connectedness between risks sufficiently to fully foresee the impacts on equity markets, interest rates, operational risks  and persistency risks.