South Africa Insurance Report Q4 2017
Gradual disinflation, which should bring consumer price growth sustainably back below 6.0% in 2017, supports the outlook for South Africa, where the life insurance market is an important conduit for organised savings. The non-life market in South Africa is expected to record steady growth over the forecast period to 2021, though the sector will continue to lag behind the life sector in terms of overall premiums written. It will also lag in annual % growth terms. In inflation adjusted local currency terms, growth in the non-life sector will be close to zero, for at least the next year or so, in a context where key segments of this sector are much more sensitive to the economic cycle than the life sector and real GDP will remain very sluggish, even if a gradual reduction in interest rates offers some support to consumer demand for big ticket items such as vehicle purchases.
Latest Updates And Key Forecasts
We predict average nominal growth in life insurance in rand terms of 8.7% across the period 2017 to 2021, with premium growth in US dollar terms set to be slightly higher than this, thanks to an extended recovery in the exchange rate.
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