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Non-life Insurance Industry Results

Non-life Insurance Industry Results

In the midst of the current environment in which we are experiencing one of the most unprecedented world-wide occurrences of the Coronavirus and the related lockdown measures, it is hard to think and reflect on a time before this.

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Non-life Insurance Industry Results

Following a contraction of -1.4% and -0.8% in the fourth and third quarters of 2019 respectively, the South African gross domestic product (GDP) ended 2019 with an overall real growth rate of 0.2%. This is compared to a real GDP growth rate of 0.8%in 2018.

Growth was constrained by electricity supply shortages, weak business confidence and low public investment. The year-on-year annual consumer price inflation was 4.1% in December 2019. Inflation for the insurance sector, contributing to the consumer price index, was 6.8% year-on-year in December 2019. In 2019 South African consumers struggled under increased fuel prices, higher electricity tariffs and lower earnings. South Africa’s structural problems, including high unemployment and income inequality amongst other social problems, have persisted.

Unstable debt ratios, corruption and the poor financial and operational standing of  South Africa’s state-owned enterprises also play a significant role. During 2019 the risk of a Moody’s downgrade overshadowed the economic outlook and business confidence.

© 2020 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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