Market Trends of South Africa Property & Casualty Insurance Industry
Digitalization and Automation is on the Rise
Africa is one of the fastest-growing insurance markets in the world, with a market value of USD 81.6 billion in 2022 and projected to reach USD 123.8 billion in 2028. However, while Africa accounts for 18% of the global population, the penetration rate of the insurance market in the continent is only about 2%.
Digitalization has revolutionized the insurance sector. Insurance companies are offering convenience, efficiency, and personalization to their customers. Insurtech companies use cutting-edge technologies to provide innovative insurance solutions and services based on customer preferences. This allows customers to compare different insurance policies and select the one that best suits their needs.
The average audience size of insurance companies is five times that of any other social network on Facebook. LinkedIn is the second largest social network for insurance companies, with an average audience size growth of 20% year-on-year in 2017. On YouTube, the average audience size (as measured by subscribers to a channel) grew by more than 55%. Insurance company audiences grew the least on Twitter. Instagram audiences grew by almost 20%. However, the average audience for insurance companies is lagging far behind the average audience size on other social networks.
Gross Written Premiums is on the Rise
Gross written premium in the South African general insurance market in 2021 stood at ZAR136,9 billion (USD 9,3 billion) and is projected to increase by more than 3% during the forecast period. Grid failure is a growing worry for South African insurers. Load shedding in the winter, but the grid has become unstable. Power cuts for long periods are common in the summer. Insurers have an important role to play. Grid failure can cause huge damage.
In September 2022, 'Stage 6' power cuts were introduced by state utility Eskom, which meant that most South Africans were without power for six to eight hours every day. Load shedding or blackouts aren't covered by insurance, but most insurers cover damage to sensitive electronics caused by surges. Damage to your home's contents or machinery caused by surges results in higher claims. Frequent surges also cause security systems to malfunction, resulting in increased theft and fires.
Africa's insurance premium total value in 2021 was approximately USD 74 billion. This equates to approximately one percent of the global insurance premium total. South Africa had the highest insurance premium participation on the continent. About USD 51 billion was paid into policies in the country for insured individuals and businesses. Morocco ranked second in the ranking of insurance premium total value at USD 6.3 billion.
