According the Association for Savings and Investment South Africa (ASISA), in addition to increasing sales of life and disability insurance and savings polices last year, policyholders also maintained and increased their in-force recurring premiums. ASISA said total recurring premiums increased by 9% from R66.8bn to R72.8bn in 2010.
However, despite these gains the industry suffered an increase in the number of surrendered policies last year. ASISA said the total value of surrendered policies in 2010 increased 11% from R33bn in 2009 to R36.7bn.
A policy is surrendered when a policyholder stops paying premiums and withdraws the fund value before maturity.
Meanwhile, lapses – where a policyholder stops paying premiums before the fund value exceeds the unrecovered costs meaning that the paid-up (or surrender) value is zero – fell by 2% last year to 5.1 million policies.
In total the assets managed by South Africa’s life insurance industry increased by 13% by the end of last year to R1.3trn from R1.13trn at the end of 2009.
Commenting on the results, Peter Dempsey, CEO of ASISA, said the industry remains stable and is in good health.
“The life industry managed to grow new individual and group business by an inflation beating percentage last year,” he said. “Considering that the operating environment remained challenging in 2010 with more than one million jobs lost, these are solid results achieved under tough operating conditions.”
