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PA Annual Report – Number crunching the insurance industry

The Prudential Authority’s annual report was covered in various media publications where the focus was mainly on the banking sector’s assets. The report also shared numbers from the insurance industry:

Entities per sector Number of entities Balance Sheet Size R millions (Dec 2018)
Life insurance sector 73 3 004 204
Primary insurers 66 2 993 436
Cell captive entities 7 10 768
Non-life insurance sector 86 189 983
Primary insurers 73 149 882
Cell captive entities 5 37 584
Reinsurers 11 48 370
Life reinsurers 3 7 256
Non-life reinsurers 3 7 279
Composite reinsurers 5 33 835

The PA further reported that net premium income (after deducting premiums for reinsurance) for primary life insurers (those that do not conduct business solely as reinsurers), cell captives and reinsurers came to R281 million for the six months ending December 2018. Benefit payments for the same period totalled R225 million. Insurance companies make a significant portion of their income from investment revenues (both realised and unrealised). The 2018 calendar year saw particular challenges, which included slow economic growth, poor investment returns, and volatility in the exchange rate.

The total assets in respect of the primary life insurers, cell captives and reinsurance industry stood at R3 011 billion as at the end of December 2018. The majority of these assets were invested in investment funds and equities.

The gross premiums of primary insurers (those that do not conduct business solely as reinsurers), cell captives, captives and reinsurers in the non-life insurance industry were R75 million for the six months ending December 2018. The underwriting results (where the underwriting profit is expressed as a percentage of net earned premiums) stood at 10% for the primary insurers, cell captives, captives and reinsurers in the non-life insurance industry as at the end of December 2018. The non-life insurance industry did not experience any catastrophic events during 2018. The six-monthly operating profits, which included investment income, stood at R7.3 billion as at the end of December 2018, and were also affected by subdued investor sentiments.

Click here to download the Prudential Authority’s Annual Report.

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