Before the COVID-19 pandemic, the South African Short-Term Insurance market was on a strong growth trajectory, increasing by a solid 4.3% in insurance premium volumes, between 2018 and 2019. However, similar to the global market situation, the local market has been negatively impacted by the COVID-19 pandemic and subsequent lockdown measures, with a growing number of consumers unable to pay their insurance premiums. There has also been a sharp decline in consumer confidence in Short-Term insurers, as many insurers have been reluctant to pay business interruption claims, negatively impacting the reputation of the industry. These are just a few of the insights from the recently published South African Short-Term Insurance Industry Landscape Report.
The report also shows that a number of market trends have been developing, based on the specific impact of the COVID-19 pandemic. In particular, niche risk solutions have gained popularity in South Africa, as many consumers and businesses are taking advantage of the certainty of niche insurance solutions. “Despite broad insurance coverage, such as motor, household and business assets remaining under pressure, specialised niche insurance products are seeing substantial growth. These include mechanical warranty, risk insurance and goods in transit cover, travel insurance, and cybercrime insurance,” according to the research results.
The 168-page report is only available for purchase, but readers can click here to read more about the key insights regarding the growth of niche risk solutions as published in the sample report.
“As the Insurance industry continues to change, demand for specialised insurance is likely to increase. As such, many new insurance products and technologies offering cover for specific and unique risks and events are set to be released, a trend which is likely to continue in coming years,” the report notes.