Fitch Ratings says in a new special report that the improved performance of South African life insurers in H110 was driven by resilient operating performances and capital levels and improved persistency experience, despite the tough operating environment.
“Although the performance of the South African life insurance market was resilient in H110, it continues to face several challenges, which were exacerbated by the recent financial crisis,” says Nicole Gibb, Associate Director in Fitch’s Insurance team. “The industry was affected by negative persistency experience as a result of pressure on consumers’ disposable income, volatile equity markets and reduced consumer spending. Although there are signs that persistency is improving, it remains to be seen whether the improvement will be lasting.”
The report also discusses important trends and regulatory changes which will affect the South African life insurance market. Fitch expects the performance of life insurance companies to gradually improve but predicts that earnings will remain under pressure from reduced disposable incomes and the ongoing tough, albeit improving, South African and global investment market conditions.
Source : Fitch Ratings press Release
