The life insurance industry in South Africa continues to evolve. We have identfied three trends which seem to be of particular relevance to South African insurers.
The concept of the one-stop financial service provider is of increasing prevalence. In the past year Discovery obtained a banking licence; Capitec launched
funeral insurance (underwritten by Sanlam); FNB and Liberty Life obtained a short-term insurance licence; and Investec Life reinvigorated their offering.
Corporate activity continues with the ongoing managed separation of Old Mutual, which resulted in the listing on the Johannesburg Stock Exchange (JSE) of Old Mutual Limited in June 2018. It is anticipated that Old Mutual's controlling stake in Nedbank will be unbundled before the end of 2018.
Meanwhile, Sanlam continued to expand in 2017. They purchased a $1billion stake in Saham Finances (a Pan-Africa insurance group) and onboarded Brightrock as a new underwriting manager.
News coverage of life insurers in the last twelve months has shown an increased focus on customer fairness and market conduct. This is unsurprising, with the establishment of the Financial Sector Conduct Authority as a separate entity to the Prudential Authority. This is also a worldwide trend as consumer education on financial products and regulators' responsibilities both continue to grow. Focus appears to be shifting from fairness at the claims stage to fairness at the sales and onboarding stage. The focus is to identify and avoid what could turn out to be unfair, rather than remediate unfair treatment after the event.
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