In November 2023, the Prudential Authority (“PA”) published its presentation of the 2022 Life Insurance Industry and Non-Life Industry Experience.
1. 2022 Life Insurance Industry Presentation:
The presentation was based on the 2018 – 2022 Annual quantitative reporting templates (“QRT”) submitted to the Prudential Authority by 66 insurers.
- A total number of 11 licensed and active microinsurers in Q2 of 2023, 8 of the 11 are life microinsurers [2022: 9 licensed and 6 active, 4 of 6 were life microinsurers].
A challenge was noted in terms of data limitation concerning microinsurers, where a lack of information was attributed to a delay between when microinsurers are licensed and then start reporting to the PA. It was found that, on average, microinsurers only start reporting 3 quarters after being licensed and that the quality of submissions made were lacking.
The presentation also provided other industry information, ranking the top 10 insurers according to their assets.
According to the data received by the PA, gross premiums increased from 2020 into 2022, with a spike in claims from 2020, into 2021 and a decrease in claims in 2022. This spike in 2020 and 2021 can be attributed to the COVID-19 pandemic. In terms of premiums and benefits per class of business, the majority of funds are within the investment class, followed by the risk class of business.
The presentation provides further insight as to the overall movement of business within the individual business space, providing a view of the premiums in force at the start of the year, end of the year and other aspects such as new policies issued, claims paid, surrenders and lapses processed for the period 2018 to 2022.
The data contained in the presentation also includes an overview of business movements for group business and individual and business data for cell captives. In addition, the PA’s findings in terms of data on expenses, basic own funds, assets and liabilities, solvency capital requirements and liquidity requirements are contained in the presentation.
2. 2022 Non-Life Insurance Industry Presentation
The presentation provides a report of the analysis of the 2021 annual quantitative reporting templates (“QRT”) submitted to the Prudential Authority by 72 non-life insurers.
The 72 insurers were made up as follows:
- 55 Primary insurers (In 2020: 54 Primary insurers)
- 6 Captive insurers (In 2020: 6 Captive insurers)
- 5 Cell Captive insurers (In 2020: 6 Cell captive insurers)
- 6 Reinsurers (In 2020: 7 Reinsurers)
From the data received, the non-life industry has experienced a significant impact on their book of business in the last few years. This is attributed to various factors, including but not limited to severe weather conditions in the form of floods in both KwaZulu Natal and Cape Town, rioting, COVID-19 and other business interruptions. The impact of the flooding has been made worse by poor infrastructure maintenance.
The presentation provides a view of the gross written premiums by each insurer and the premiums and type of claims submitted for different lines of business, with motor, property and health insurance making up the biggest portion of the non-life risk environment.
The non-life presentation indicates that industry premiums continue the upward trend. In the period covered by the report, claims ratios were lower on average than the previous year, and the average premium retention ratio remained relatively stable. There was an average growth of 12% on total industry assets.
Further data contained in the non-life presentation also includes an overview of balance sheets, total assets held, liabilities, own funds, as well as a detailed breakdown of findings in terms of non-life catastrophe risk and claims ratio in terms of different categories, including per line of business (liability, agricultural and transport) and expense rations by class of business.
The life and non-life industry presentations provides financial services providers with an in-depth view of the information that the PA collects from insurers to measure industry interactions, client outcomes and the overall stability of insurance product providers.