2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
NEW HORIZONS 2014 ANNUAL REVIEW
SAIA ANNUAL REVIEW 2014
Content2014
1 SAIA Vision and Mission ......................................................................... 2
2 Message from the Chairman ................................................................. 4
3 Message from the Chief Executive ......................................................... 6
4 Widening the horizon on Transformation and Social Risks ......................... 18
5 Governance Risks: Levelling the playing fields ........................................... 22
6 Reinsurers ............................................................................................. 28
7 Solvency Assessment and Management .................................................. 30
8 Insurance Risks ...................................................................................... 34
9 SAIA Finance and Operations .................................................................. 42
10 The Association of Marine Underwriters in South Africa ......................... 44
11 The South African Machinery Insurers’ Association ................................. 48
12 SAIA Highlights ...................................................................................... 51
13 Membership .......................................................................................... 54
14 Beyond the horizon .............................................................................. 60
NEW HORIZONS n SAIA l 1
SAIA vision
To promote and represent the interests of the short-term insurance
industry, while leading and enhancing the efforts of the industry to
become recognised and trusted as an important contributor to the
South African economy and society.
2 l SAIA n NEW HORIZONS
SAIA ANNUAL REVIEW 2014
SAIA mission
• To encourage fair and ethical treatment of consumers of short-term
insurance products.
• Representing the short-term insurance industry with all stakeholders
and at all levels in such a way that these stakeholders have trust and
confidence in the industry.
• Creating an environment in which the members of our industry can
share information, debate important and relevant issues and create
a common vision for the short-term insurance industry.
• Creating opportunities for the industry to continue with and embark
on initiatives that will enhance its image and reputation among all
stakeholders.
• Promoting understanding of short-term insurance to all
stakeholders.
• Promoting awareness of the industry and its contributions to society
and the South African economy.
NEW HORIZONS n SAIA l 3
,, A rocket will never be able to leave the earth’s atmosphere.
- New York Times 1936
,,
4 l SAIA n NEW HORIZONS
MESSAGE FROM THE CHAIRMAN
NEW
horizons
T
he world has changed. In particular, the way the global Finally, and most practically, there should be wider acceptance
financial services sector is structured is undergoing of the validity of the Pareto 80/20 rule. Most of the benefits
fundamental and irreversible change. However, of the proposed regulatory changes can be derived fairly
change brings with it not only risk but also opportunity. This predictably by means of a few absolutely key pieces of
year’s theme of New Horizons therefore aptly captures the legislation supported by a well-structured set of regulations
role of change as the defining theme of our times. and do not require the introduction of numerous legislative
instruments.
In the aftermath of the financial crisis of 2008 the pragmatic
common-sense approach to reform has become a head-long Engagement on these issues is particularly important in
rush. Worldwide, the insurance sector has not managed to respect of the short-term insurance industry because it plays
convince regulators that insurers exhibit fundamentally different a foundational role in the success of any economic system
risk profiles from banks and do not generate the systemic that involves the assumption of risk in expectation of a return.
risks that are characteristic of the modern banking system. Economic enterprise is simply inconceivable in the absence
Unfortunately, policymakers have overreacted significantly and of a mechanism by which risk can be accurately priced and
are set on a path that will impose inappropriate “bank-like” efficiently transferred.
regulation upon the insurance sector, which, across the globe,
is beginning to identify future regulatory change as the number We must therefore grasp the opportunity that still remains to
one business risk, outstripping even cybercrime. communicate our bona fides on the concerns outlined above.
In this regard the SAIA Board is fully intent on raising our levels
Closer to home, within our own motor insurance industry, it is of engagement with policymakers, legislators, regulators and
arguably the alarming weakening of the rand against the major broader society. The SAIA must make its contribution towards
currencies that represents the most immediate threat. While the entrenchment of a vibrant short-term insurance industry
our industry is for the moment absorbing most of the huge characterised by increased levels of efficiency, enhanced
increases in the costs of replacing parts in damaged vehicles this financial soundness and a value proposition that is both
is of course not sustainable in the longer term. sustainable and fair towards our customers.
However, all is not doom and gloom. Possibilities such as In putting together this Chairman’s report I am well aware
making Motor Third Party Property Damage cover compulsory of my reliance on the goodwill of others, including that of
or introducing micro-insurance legislation, which will assist in our previous chairman of many years, Ronnie Napier. I must
the expansion of insurance cover to low-income households, therefore express my deep appreciation for the generous
are examples of the potential for growth that could result from support I have received from many quarters. Not least of
a balanced approach to regulatory change. these are members of the SAIA Executive Committee and
the Board who have helped me to get up to speed on the
To achieve this balance there needs to be recognition in the numerous issues with which we are engaged as an industry.
first place that the risk represented by poor and inefficient
implementation is a risk we should not accept. For the South Under the leadership of Barry Scott, our executive team
African economy, this particular risk is exacerbated by the sheer is working hard on all the concerns and priorities raised by
volume of highly technical work to be done in an environment members, as is evident in the Chief Executive’s report. There
where such skills are in very short supply. is of course much that still has to be achieved but I have every
confidence that the work being done at SAIA will soon prove
Secondly, a rigorous approach needs to be taken in respect of its worth.
the economic impact assessments of regulatory interventions.
These need to be carried out early enough to inform the Themba Gamedze
process of developing detailed new legislation. SAIA Chairman
NEW HORIZONS n SAIA l 5,, The Americans have need of the
telephone, but we do not.
We have plenty of messenger boys.
,,
- Sir William Preece, Chief Engineer,
British Post Office,1878
6 l SAIA n NEW HORIZONSMESSAGE FROM THE CHIEF EXECUTIVE
everchanging
HORIZONS
T
he challenges facing the short-term insurance industry five emerging markets. We have been granted membership
in South Africa are constantly evolving. In order to of these “clubs” because we are the most influential economy
meet this everchanging environment, organisations in Africa. While we may enjoy the benefits that membership
such as the South African Insurance Association (SAIA) need of these grouping brings us, the flip side of this coin is that
to evolve. lawmakers need to bring the level of our financial regulation
up to the standard of the largest economies in the world.
For this reason, we regularly re-evaluate our role, with specific
reference to our key strategic areas. This was done as recently For example, we regularly undergo Financial Sector
as the fourth quarter of 2013, at which time the SAIA Board Assessment Programme reviews, performed by the World
agreed on a new set of key strategic areas, and revised the Bank/IMF, which produces scorecards indicating where
structure of the Board Committees in order to meet these. policymakers need to improve. Similarly, our Financial Services
As of November 2013, the SAIA key strategic areas are: Board is on the executive of the International Association of
• Governance Risks (including legislation and regulation) Insurance Supervisors, which has twenty-six Insurance Core
• Insurance Risks (including motor, property, agriculture, Principles for regulators, which need to be complied with.
marine, engineering)
• Transformation and Social Risks (including image and So, in order to achieve this, South Africa has embarked upon
reputation and human capital development) a rapid modernisation of our regulatory regime. So far, so
• Reinsurers good! However, this is being done at a pace far faster than
the larger economies implemented this change. We recognise
The main body of this Annual Review covers the activities that the SAIA and other industry associations active in the
of the SAIA over the last year in detail. My message will sector are probably as large as the sector can realistically
therefore be confined to placing the role of the SAIA into the afford, yet we are in many cases only 1/10th of the size of
context of the environment in which we find ourselves, and the insurance associations in the other G20 states. Insurance
giving some thoughts about the future. Europe, the European confederation of insurance associations,
where Solvency II was originally designed, represents
Our theme “New Horizons” national associations, which collectively employ more than
one thousand people. Whereas Solvency II will have taken
Each year we choose a theme for our Annual Review which fourteen years in Europe, we have caught up in six, and will
reflects management’s perspective of the position in which we now launch simultaneously with Europe.
find ourselves. This year our theme of “New Horizons” was
chosen because in many areas much of the groundwork has So, for a relatively small association like the SAIA, this pace
been done, and we can now literally see the goalposts. of legislative change represents a tsunami of legislation, far
beyond which we can comfortably address. We are well
‘Tsunami’ of Legislation and Regulation aware that the use of “tsunami” does not sit comfortably with
all, but the term has now become part of the local vocabulary,
I am often asked why it is that the South African financial so we use it without apology.
services sector is going through such an all-encompassing
programme of regulatory reform, and why it is that the SAIA is Similarly, for our members, the compliance challenge has
not doing more to challenge these reforms. become a massive burden. In my member visits to CEOs,
the lament most often heard is that CEOs, especially of small
The answer is really quite simple! South Africa is a member to medium-sized companies, now spend in excess of 50% of
of the G20 group of nations, despite not being among the their time dealing with compliance. This detracts from their
largest twenty economies. Similarly, we are members of the ability to deal with underwriting challenges, marketing their
BRICS grouping, again despite not being one of the largest products and growing their businesses.
NEW HORIZONS n SAIA l 7Of course, this also comes at a cost. While not solely due There are particular unique challenges for the insurance
to compliance, if one analyses the costs of doing insurance sector in terms of the FSC, these being access to insurance
business over the last six years, costs plus commissions have and enterprise development. These are over and above the
increased from 25% of premium to 32% of premium for other imperatives such as work-place transformation. We
typical insurance. This 28% increase has certainly placed need to work in partnership with government institutions in
underwriting margins under pressure, with this increase of order to realise the objectives put in place through the Code.
course coming straight out of the underwriting margin and
ultimately being passed on to consumers. The access to insurance aspect has proven to be particularly
difficult for insurers, which are expected to sell products in
So for 2014 most of the existing initiatives will continue, markets with which, in most cases, they are not familiar.
with final implementation being in the not too distant future. There is no ready-made intermediary network in place,
However 2014 is the crucial year for us to get it right! especially in the areas where the products need to be sold.
There are also some legislative challenges, around the FAIS
Some of the more important issues that will require our focus area, and the failure of the legislative process to address
during the year are: the much-awaited Microinsurance Bill (which we now
• Solvency Assessment and Management (SAM) believe will no longer be addressed through a specific bill). A
• Treating Customers Fairly Microinsurance Bill would have allowed composite insurers,
• Twin Peaks, with the concomitant challenges to “Who with less rigorous solvency and FAIS requirements. Again, we
regulates what?” need to work with government in order to identify factors
• Retail Distribution Review inhibiting the growth of this market and remove any barriers.
• BRICS Reinsurance Project
• Policyholder Protection Scheme, which will see a fund In the area of enterprise development, the DTI-led
being developed in order to protect consumers in the discussions around the motor body repair industry continue,
event of the failure of an insurer with progress being made at last. There is pressure for
• Third-party Cell Captive Review the industry to play more of a role in the development of
• Ongoing binder regulation issues black suppliers, in particular around the MBR industry, and
• A review of the ombudsman landscape increasingly in the building trade. We have previously shied
away from creating our own enterprise development fund at
There is a bottleneck on the legislative programme in the SAIA, but this possibility now needs urgent attention. As
Parliament, which does not help, and which brings with an alternative, we are looking at developing a relationship with
it additional time pressures. In addition, as a result of the the ASISA enterprise development fund and kick-starting a
upcoming national elections to be held in May 2014, collective approach to enterprise development.
including the process to elect a new National Assembly and
provincial legislature in each province as well as Parliamentary We will continue with our flagship consumer education
Committee Members, the parliamentary schedule will be project, which has now provided more than R56 million to
challenging. basic financial literacy education.
As a result, we anticipate 2014 being a year of tight deadlines, It has become increasingly obvious that the push to transform
with lots of pressure to get submissions done in a relatively the workplace needs a boost. For this reason, we have
short time. initiated a project which has brought in the FIA and IISA to
address the industry Human Capital Development challenges.
Transformation 2014 should see major progress in terms of this project.
In discussions with government and other stakeholders it Insurance Risks
becomes clear that there is a sense of frustration with the
slow progress of transformation in the sector. The much- Our Board has recognised that the underwriting results in
awaited Financial Sector Code (FSC) was finally gazetted in the industry have come under pressure of late, and that we
2012, and is now in force, the standards have been finalised need to do something to address this. The Board agreed
and the training for the industry is complete. However, much that we need a specific focus on the underwriting areas and
needs to be done to achieve the objectives of the Code. accordingly created a new Board Committee called Insurance
Risks. This new portfolio carries many challenges, as we need
Furthermore, while the old Financial Sector Charter was a to consolidate much of the work previously done under a
voluntary commitment and companies could instead choose variety of portfolios.
to report against the generic codes, the industry code is now
part of the legislated transformation environment. This also The new portfolio includes, among others, Motor, Property,
brings the intermediaries into the FSC for the first time. Agriculture, Marine, Construction and Machinery.
8 l SAIA n NEW HORIZONSSome of the specific projects for 2014 and onwards include: assessment of our efficiency. It is proposed that this review
• The Green Geyser project, which seeks to see one be completed in time for a strategy session of the SAIA Board
million insurance replacement geysers being installed planned for September 2014.
as alternatives to electrical geysers. This project has
seemingly remained dependent in its initial stages upon Being at the helm in the past 20 years
government funding, perhaps through Eskom. However,
with this funding now seeming unlikely, we need to find an In March 2014 I celebrated 20 years’ service as the Chief
innovative way for this project to proceed. Executive of the SAIA. I took over this position at a time
• Sustainability of motor insurance is still an issue, with when the organisation was in serious disrepute with its Board,
the need for compulsory third-party motor property members and stakeholders, and we had to embark on a
insurance, and certainly the need to address road safety. vigorous programme to restore the credibility of the SAIA.
We expect to see major progress on these initiatives During this period, South Africa was heading towards its first
during 2014. post-apartheid election, and the start of a period of enormous
• Sustainability in the property portfolio, including issues change for the country. This was a time when the country as a
related to climate risk, and the looming problem of acid whole was looking to a new horizon.
mine water
• Sustainability of agricultural insurance and specifically multi- I often remind my colleagues that the SAIA doesn’t have a
peril crop insurance and the related challenges with regard tangible product that it sells and that as an organisation we are
to food security, especially the need to extend insurance nothing without our employees. While we have a Board and
cover to emerging farmers many committees which provide us with guidance, it is the
management and employees of the SAIA that must provide
Technology Projects the glue to keep the organisation together. The intellectual
capital of the organisation is locked up in the expertise of
After many years of incubation the short-term insurance data our colleagues and they create the organisation’s institutional
switch STRIDE is ready and open for business. This is an memory.
essential element of the compliance need contained in the
binder regulations. The users of STRIDE have themselves In contemplating my 20 years’ service, I am reminded that the
struggled to implement the system changes required to success of the organisation is solely built by the people who
use STRIDE; this includes both insurers and intermediaries. have served the organisation.
2014 will be a watershed year for STRIDE, and usage needs
to reach a level which makes it economical for STRIDE to I wish to give a heartfelt thanks to Ronnie Napier, our long-
continue. serving Chairman who stepped down from the Board in
2013. Ronnie joined the SAIA Board in March 1994, the
While bringing STRIDE to fruition is the obvious key issue, same year that I joined the SAIA. Ronnie has been an integral
there are ongoing data quality issues in the industry. An part of my journey in the past 20 years at the SAIA. During
extremely important initiative not only for compliance reasons his tenure as Chairman, he became a friend and mentor, and
but which would enable many industry initiatives is the ability provided the SAIA with invaluable assistance, leadership and
to centralise data, which is addressed by the Finance and advice. Ronnie’s wise counsel will be missed and words alone
Insured Vehicle (FIVS) project. This project is also expected to cannot express our sincere gratitude for his contribution to the
deliver more accurate industry statistics to government around industry.
key negotiation points.
We also took leave of our deputy Chairman, Mike Truter, who
In General retired from the helm of Credit Guarantee. Mike has also put
in many long hours in support of the SAIA. We are also deeply
While I have talked about specific issues, we are acutely aware indebted to him for his support.
that our industry image and reputation still needs attention.
Under the guidance of our newly appointed Chairman, 2014 will be one of our most challenging years, with so
Themba Gamedze, we expect to more fully engage many issues reaching critical junctures. We have a dedicated
government at top level on many of these issues. We need and capable team at the SAIA and given the support of our
to tell government that insurance plays an essential role in the members and our Board, I’m confident we will be able to rise
economy, protecting the assets and investments of our citizens to these challenges. I’m delighted to present to you this Annual
and businesses. We are an ethical industry, with the interests Review.
of our consumers at heart and with a long track record.
We have also embarked on a strategic review of the Barry Scott
effectiveness of SAIA’s engagement with government and an SAIA Chief Executive
NEW HORIZONS n SAIA l 91.1 Industry Results
PRIMARY INSURERS: 31 DECEMBER 2013
PRIMARY INSURERS: 31 DECEMBER 2013
Claims Ratio:
Claims Ratio:Primary
PrimaryInsurers
Insurers Claims
Claims incurred:
incurred:
2013: R40
2013: 048m m
R40,048
2012: R37
2012: 181m m
R37,181
2011 2012 2013 2011: R32
2011: 970m m
R32,970
75%
66% 67%
61% 62% 61%
57% 52% 51% 55% 55%
50% 50%
42% 44% 42% 46%
38% 38%
35% 30%
24% 23%
1.1
15% Industry Results
Property Transportation Motor Accident & Guarantee Liability Engineering Miscellaneous
PRIMARY INSURERS: 31 DECEMBER 2013
Health
Claims for the two largest classes of business, namely Property and Motor, are slightly up for the 2013 calendar year. Motor
Claims for the two largest classes of business namely Property and Motor are slightly up for the 2013
PRIMARY INSURERS:
insurance
Claims Ratio: Primary
claims remain high. In 2011, there were two insurers who recorded higher than usual claims in the liability business class.
calendar year. Motor insurance claims remain high. In 2011, there were two insurers who recorded higher Insu
than usual claims in the liability business class.
2011 2012 2013
AssetAsset allocations
allocation ofInsurers
for Primary 75%
Primary Insurers 66% 67%
61% 62% 61%
Net Premium SplitOther
- 6%Primary
assets
57%
Asset
52% allocation
42%
51% for44% 42%
38%
Insurers % Primary Insurers 35%
24%
Other 15%
Debtors Outstandin
assets
g Cash and equivalent instruments are the main
Outstanding
premiums 5% 3% 3% 8% Shares
6%
3% 7%
Property 27% asset
premiums classes due to the nature of the short-term
Debtors
7% 7%insurance industry’s risks. There is no observed
Property 8% Transportation Motor Accident & Guarantee Lia
33% Transportation
Government & semi- significant movement in asset Shares
allocation dueHealth
to
Fixed assets Motor government 27%
1% 11% preparations for SAM. Governme
44% Cash and deposits Accident & Health
38% Debentures and ClaimsFixed
for the two largest classes of business nt &namely
semi- Property and Mot
2% Guarantee mortgages assets governme
calendar 1%year. Motor Cashinsurance
and claims remain high. In 2011, there wer
2% nt
Liability than usual claims in the liability business
deposits Debentureclass.11%
38% s and
2013: R68,622 m Engineering
2012: R64,715 m mortgages
2011: R60,283 m Miscellaneous 2%
Net Premium Split - Primary Insurers %
Net Premium Split - Primary A
Insurers %
Outstandin
Net premiums increased 6.04% in 2013 while the
Net premiums increased
Cash and5%
equivalent
3% 3% instruments are the main g
premiums
average consumer inflation for South Africa during
6,04% in 2013 while the 3%
assets
Property
7% class due to the nature of the short-term 7%
Debt
2013 was 5.77%. The increase in Net premiums
average consumer is inflation 33% Transportation
insurance industry’s risks. We have not observed
8%
1.31% lower than in 2012. for South Africa during 2013
any significant movement in assetMotor
allocation due
was 5,77%. The increase 44%
to preparations for SAM. Accident & Health Fixed
in Net premiums is 1,31% 2% Guarantee assets
lower than in 2012. 1%
Liability
2013: R68 622m
2013: R68,622 m Engineering
2012: R64,715
R64 715mm
2011: R60,283
2011: R60 283mm Miscellaneous
Net premiums increased 6.04% in 2013 while the Cash and equi
10 l SAIA n NEW HORIZONS average consumer inflation for South Africa during assets class du
2013 was 5.77%. The increase in Net premiums is insurance indu
1.31% lower than in 2012.INDUSTRY RESULTS
Assets, Liabilities and Capital Adequacy
Assets, Liabilites and CAR - R'bn Profitability for 2013 - R'bn
Requirements - R’bn
RR120
120 Assets, Liabilites and CAR - R'bn Profitability for
R 12 Profitability for2013
2013- R’bn
- R'bn
100 R 120
RR100 R 10
R R12
12
R8
80 R 100
RR80 R R10
10
R6
RR8
8
Axis Title
60 R 80
RR60 R4
RR6
6
R2
Axis Title
40 R 60
RR40 RR4
4
R0
RR2
2
Mar Jun- Sep- Dec
20 R 40
Assets, Liabilites and CAR - R'mRR20 -13 13 13 -13
Profitability for 2013 - R'm RR0
0
R 120,000 Underwriting Mar Jun- Sep- Dec
R 12,000 R 1.3 R 3.7 R 5.9 R 6.5
R -R0 R 20 R 10,000 Profit/(Loss) -13 13 13 -13
R 100,000
Dec-11 R 8,000
Dec-12 Jun-13 Dec-13
Underwriting
UW + Investment R1.3
R 1.3 R3.7
R 3.7 R5.9
R R5.9 R6.5
R 6.5
R 80,000 Total Assets R - RR90
90 RR102
102
R 6,000 RR106
106 RR112
112 Profit/(Loss) R 2.4
Income
R 6.0 R 9.4 11.4
Total Liabilities Dec-11
R 4,000 Dec-12R57 Jun-13R59 Dec-13
R 60,000 RR50
50 RR54
R 2,00054 R 57 R 59 UW + Investment
Total Assets R9 R 90 RR18 R 102R21 R 106R22 R 112 R 2.4
R2.4 R 6.0
R6.0 R 9.4
R9.4 RR11.4
11.4
CAR R9 R 018 R 21 Income
Sep- R 22
R 40,000
Mar Jun- Dec
R 20,000 Total Liabilities R 50 R 54 13
-13 R1357 -13 R 59
Underwriting
CAR R9
Profit/(Loss) R 18 R 3,730
R 1,301 RR 21
5,881 R 6,505 R 22
R-
Dec-11 TheDec-12SAMJun-13interim Dec-13measures on Capital Adequacy introduced Profitability remains relatively healthy for the Primary
R 90,472 The SAM interim
R 111,686 measures on Capital Adequacy
UW + Investment
Total Assets R 101,547 R 105,649 R 2,363 R 6,045 R 9,407 R 11,421
Income
Total Liabilities R 49,659 inR 54,391
Board
introduced Notice in 169
Board of 2011
Notice had169 a significant
of 2011 impact
had a on the Insurers as a whole. However, natural disasters such as
Profitability remains relatively healthy for the
R 56,957 R 59,257
CAR R 9,284
The SAM
R 18,400 R 20,705 R 22,091
interim measures on Capital Adequacy
Capital
significant impact on the Capital Adequacy to 2012,
Adequacy Requirements (CAR) from 2011 Primarythe hail storms
Insurers as ainwhole.
GautengHowever
during thenatural
fourth quarter of
The SAM interim measures with aintroduced
Requirementsfurther
on Capital Adequacy
in Board
noticeable
from 2011 Notice
increase
to 169
in 2013.
2012 withof a2011
Primary
further had a
insurers, Profitability
2013 had a remains
substantial relatively
impact on healthy forprofit.
underwriting
disasters such as the hail storms in Gauteng during the
introduced in Board Notice 169 ofsignificant 2011 had a impact on the Capital Adequacy
Primary Insurers as ahad
whole. However natural
noticeable
however,
significant impact on the Capital Adequacy
increase
remain Profitability
in
well capitalised remains
2013. Primary relatively
based oninsurers healthy for the
the current
the fourth
Primary Insurers as a whole. However natural
however
quarter of 2013 a substantial
Requirements from 2011 regulatory to 2012 Requirements
remain withwell capitalised
arequirements
further from
with
2011
based
disastersan
such
to
ason
excess
2012
thethe
with
current a further
disasters such as the
impact on underwriting profit.
in storms
hail assets inof R30 338m.
Gauteng during hail storms in Gauteng during
noticeable
noticeable increase in 2013. Primary
regulatory increase
insurers however
requirements in
the fourth 2013.
quarter of Primary insurers
2013 had a substantial
with an excess in assets of however the fourth quarter of 2013 had a substantial
remain well capitalised based on the current impact on underwriting profit.
R30,
regulatory requirements with remain
an 338
excessm. well
in assets of capitalised based on the current impact on underwriting profit.
R30, 338 m. regulatory requirements with an excess in assets of
R30,vs.
Gross 338Net m.Premium - Primary Profit as a percentage of Net Premium - %
Gross vs. Net Premium - Primary Profit as- aPrimary percentage of Net Premium - %
Insurers
Insurers - -R'm
R’m Gross vs. Net Premium
GrossInsurers - R'm
Operating profit/(loss) [incl. Investment Income] Underwriting profit/(loss)
Gross Premiums Net Premiums
vs. Net Premium - Primary
R 80,951
R80 951
R 87,675
R87 675
R96 178
R 96,178
Insurers
Gross Premiums Net -Premiums
R'm 28
26
23 22
R68
68,622
622 20 20 20 20
R60
60,283
283
R 64,715
R64 715
Gross Premiums 19 RNet Premiums
96,178
17 17 17
R 87,675 16 16
R 80,951 14
10 R 96,178
11 11 10
9
RR87,675 R6 68,622 8 8 7 7 8 9
RR 80,951 64,715
60,283
1
-1 -1 0 R 68,622
Dec 2011
Dec-11 Dec 2012
Dec-12 Dec 2013
Dec-13
1998 R 64,715
1999 2000 -22001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
R 60,283
Net
Net retention of risks based retention
on premium of risks
decreased based
slightly overon
the premium Underwriting
Underwriting
last three years with ±3%. Net profit
profit for for theInsurers
the Primary Primary Insurers
over over
the last 10 the
years last 10
remains years consistent
relatively remains however
retention for 2013 is at 71.35% of Gross Premiums. the low interest environment does have a noticeable impact on operating profit.
decreased slightly over the last three years relatively consistent, however the low interest environment does have a
with ±3%. Net retention for 2013 is at noticeable impact on operating profit.
71,35% of Gross Premiums. Dec-11 Dec-12 Dec-13
Dec-11 Dec-12 Dec-13
Net retention of risks based on premium decreased slightly over the last three years with ±3%. Net
Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
retention for 2013 is at 71.35% of Gross Premiums.
Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.
Net retention of risks based on premium decreased slightly over the last three years with ±3%. Net
retention for 2013 is at 71.35% of Gross Premiums.
NEW HORIZONS n SAIA l 11REINSURERS: 31 DECEMBER 2013
REINSURERS: 31 DECEMBER 2013
Claims
ClaimsRatio:
Ratio:Reinsurers
Reinsurers Claims
Claims incurred:
incurred:
2013:
2013:R1R1,500
500m m
2012:R1R1,514
2012: 514m m
2011 2012 2013 2011:R1R1,393
2011: 393m m
97%
74% 91%
68% 67% 68% 67% 68% 66%
58% 52% 48% 48% 58% 47%
34% 38% 45%
29% 29% 29% 27% 40%
Property Transportation Motor Accident & Guarantee Liability Engineering Miscellaneous
Health
REINSURERS: 31 DECEMBER 2013
REINSURERS -86%
Guarantee business
Guarantee business experienced
experienced unusually
unusually high claimshigh claims
during during
2013 while the 2013
largestwhile
classes the largest
- Property andclasses; Property and
Motor - remained
Motor
Asset allocation of Reinsurers
stable remained stableyear.
during the calendar during the calendar year. Claims Ratio: Reinsurers
Asset allocations of Reinsurers 2011 2012 2013
Asset allocation of Reinsurers
Net Premium
Debtors Split - Reinsurers %
Other assets 74%
5%
10%
68% 67% 68% 67% 68%
Shares 58% 52% 34% 48% 48% 58%
15% Debtors Other 38%
29% 29% 29%
5% Asset allocations
assets of the short-term
Shares Reinsurers
3%
15% 3% Outstandi are relatively 10%evenly spread. 15%An analysis of
Outstanding premiums
5% 5% Property
Property asset
ng Transportation
allocation of the Motor
last 3 yearsAccident
indicates&a Guarantee Liab
1% Transportation Government & semi-
governmentpremiums Health
32%
stable investment strategy with no noticeable
52% Motor 15% movements.
28% Cash and deposits -86
Fixed assets 16% Accident & Health
1%
3% Guarantee
Guarantee
Fixed
business experienced unusually high claims during 2013 whil
Debentures and
Liability
mortgages Motor remained stable during the calendar year.
6%
assets
Engineering 1% Governme
2013: R2,523 m Miscellaneous Debentur nt & semi-
Cash and
2012: R2,451 m Net Premium
es- and
Split Reinsurers % governme Asset al
2011: R2,291 m
Net Premium Split
deposits - Reinsurers % nt
mortgages
16%
6% 32% Debtors
5%
3% 3%
5% 5% Property Outstandi
Net premiums increased with R72m in 2013 Asset1%allocations of the short-termTransportation
Reinsurers are ng
Net premiums increased with R72m
noticeably lower than the R160m increase in 2012 relatively evenly spread. An analysis of asset premiums
in 2013 noticeably lower than the 52% Motor
from 2011. Property and Motor made up 80% of the allocation of the last 3 years indicates a stable
15%
R160m increase in 2012 from 2011. 28%
net risk premium of South African Reinsurers. investment strategy with no
Accident & Health
noticeable
Property and Motor made up 80% 3% Guarantee
of the net risk premium of South movements. Fixed
Liability
African Reinsurers. assets
Engineering 1%
2013:
2013:R2 523m
R2,523 m Miscellaneous Cash and
2012:R2
2012: R2,451
451m m deposits
2011:R2
R2,291 m
2011: 291m 16%
Net premiums increased with R72m in 2013 Asset allocation
12 l SAIA n NEW HORIZONS noticeably lower than the R160m increase in 2012 relatively evenly
from 2011. Property and Motor made up 80% of the allocation of the
net risk premium of South African Reinsurers.INDUSTRY RESULTS
Assets, Liabilities and Capital Adequacy Profitability of Reinsurers - R’m
Assets,
Assets, Liabilites
Liabilites and
Requirementsand CAR- -R'm
CAR
- R’bn R'm
bn Profitability of Reinsurers
Profitability - R'm - R'm
of Reinsurers
R 10,000
R10 R500
R 10,000R 9,000
R500
R9 R400
R 9,000
R 8,000
R8 R400
R300
R 8,000
R 7,000
R7 R300
R200
R 7,000
R 6,000
R6 R200
R100
R 6,000
R 5,000
R5
R100
R0
Assets, Liabilites andRCAR -RR'm
5,000 4,000
R4 Profitability of Reinsurers - R'm
R 3,000
R3 (R100) R0
R 10,000 R 4,000 R500
R 2,000
R2 (R200)
(R100)
R 9,000 R 3,000 R400
R 1,000 (R300)
R 8,000
R 7,000
R 2,000 RR1 -
R0
R300 (R200) 31- 30- 30- 30-
R 6,000 R 1,000 Dec- Dec- R200 Dec- (R300) Mar- Jun- Sep- Dec-
Jun-13
R100 13 31- 13 30-13 30-
13 30-
R 5,000 R- 11 12 13
R 4,000
Total Assets
Dec-
R R8.0
Dec-9,299 R0
8,043 RR9.3 R9.1 Dec-
R R9.4 Underwriting Mar- Jun- Sep- Dec-
R 3,000 R 9,140
Jun-13
(R100) 9,392 R50 13(R256) 13(R16) R100
13 13
R 2,000 11 12 (R200)R7.3 13 Profit/(Loss)
Total Liabilities R R7.3
7,289 RR8.0
8,039 R 7,340 R R7.4
7,417
R 1,000 (R300) UWUnderwriting
+ Investment
Total Assets R 8,043 R 9,299 R 9,140 31- R 9,392
30- 30- 30- R109 R50
(R111)(R256)
R186 (R16)
R369 R100
R-
Dec- Dec-
CAR RR0.3
Dec-
347 RR0.9
903 RR0.8
801 RR0.9
870
Mar- Jun- Sep- Dec- Income
Profit/(Loss)
11 Total
12 Liabilities
Jun-13 R 7,289
13 R 8,039 R 7,340 13 R 7,417
13 13 13
UW + Investment
Underwriting R109 (R111) R186 R369
Total Assets R 8,043 CAR
The SAMR 9,140
R 9,299 interimR 9,392
measures
R 347 onR Capital
903 Adequacy
R 801 R50introduced
Profit/(Loss) R (R256)
870 (R16) R100 Income
Total Liabilities R 7,289 The SAM
R 8,039 interim
R 7,340 measures onUWCapital
R 7,417 Adequacy Underwriting profit is under severe pressure. An
in Board Notice 169 of 2011 had a significant + Investment impact on
R109 (R111) R186 R369
CAR R 347 introduced
R 903 R 801in Board
R 870 Notice 169 of 2011 had
Income a analysis of underwriting profit over the last 3
the Capital
significant Adequacy
impact onRequirements
the Capital from 2011
Adequacy to 2012. Underwriting
years indicates profit
flatis profit
aprofit under severe pressure. An analysis of
environment.
The SAM interim
Reinsurers measures
remain well 2011 on
capitalisedCapital Adequacy
basedReinsurers
on the current Underwriting is under severe pressure. An
SAM interim measures Requirements
on Capital Adequacy from to 2012.
Underwriting profit is under severe pressure.underwriting
remain An profit over the last 3 years indicates a flat profit
introduced
duced in Board Notice well regulatoryin Board Notice
2011requirements
had a basedwith
169 ofcapitalised 169 of
an excess
analysis 2011 had
in assets
of underwriting a
ofprofit analysis of
over the last 3environment.
R1 105m, underwriting profit over the last 3
on the current regulatory
ficant impact on significant impact on
the Capital Adequacy
requirements
when compared withthe
with theCapital
an excess
net risk inAdequacy
years indicates
assets
retained. a flat profit environment. years indicates a flat profit environment.
of R1, 105 m
irements from 2011 to 2012. Reinsurers remain
Requirements
when
capitalised based on the
from 2011 to 2012. Reinsurers remain
compared
current regulatory with the net risk retained.
irements with well capitalised
an excess based
in assets of R1, 105 mon the current regulatory
requirements
n compared with with an excess in assets of R1, 105 m
the net risk retained.
when compared with the net risk retained.
Gross vs. Net Premium -
Grossvs.
vs.Net
NetPremium
Premium --
Gross
Reinsurers - R’m
ReinsurersProfit
- R'mas a percentage of Net Premium - Reinsurers - %
Reinsurers - R'm Operating profit/(loss) [incl. Investment Income] Underwriting profit/(loss)
Gross Premiums Net premiums
premiums Gross vs. Net PremiumR 7,712-
Premiums
Gross Premiums Net Premiums
Net
R7 574
R 7,574 R 7,712
R7 712R 7,138 R 7,574 18
R
Reinsurers - R'm
R77,138
138 16 16 16
15 15 15
14
13 13
12 12
R
Gross Premiums
R22,523
Net premiums
9 9
10
RR22,291
291 RR22,451
451 523 8
R 2,291 R 7 R 2,451
7,574 R 7,712
R 2,523 6 6
R 7,138 4 4
Dec 2011 Dec 2012 Dec 2013 1
Dec-11 Dec-12 Dec-13
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Dec-11 Dec-12 Dec-13
Net retention for 2013 is at 32,72% of Gross R 2,291 Underwriting
Underwriting R 2,451
profit is profit
under is under
severe Rsevere
pressure2,523pressure.
however the returnHowever, thearereturn
on investments on the
supporting
profitability of reinsurers.
etention for 2013 is at Premiums. OnlyPremiums.
32.72% of Gross 9% of theOnly
total9%available investmentsBusiness
of the total available Reinsurance is supporting the profitability of reinsurers.
ains in South Africa.
Reinsurance Business remains in South Africa.
Net retention for 2013 is at 32.72% of Gross Premiums. Only 9% of the total available Reinsurance Business
remains in South Africa. Dec-11 Dec-12 Dec-13
Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
Net retention
Note 2: All for
data2013 is at
obtained 32.72%
from of Gross
the Financial Premiums.
Services Board (FSB) Only 9% of the
and reproduced total
with availableofReinsurance
the permission the FSB. Business
remains in South Africa.
NEW HORIZONS n SAIA l 13CELL CAPTIVE: 31 DECEMBER 2013
CELL CAPTIVE: 31 DECEMBER 2013
CELL CAPTIVE: 31 DECEMBER 2013
Claims
Claims Ratio:Cell
Ratio: CellCaptive
Captive Insurers
Insurers
Claims
CELL CAPTIVE: 31 DECEMBER 2013 Ratio: Cell Captive Insurers
2011 2012 2013
2011 2012 2013
174%
Claims Ratio: Cell Captive
174% Insurers 126%
98%
126% 89%
73% 75% 62% 63%2011 2012 2013
55% 66% 64% 43% 98% 54% 40%
37% 39% 32% 29%174% 89% 39% 29%
73% 75% 62% 25% 64% 63% 23% 22% 24%
55% 66% 43% 54% 29% 40%
37% 39% 32% 29% 39% 126%
25% 23% 22% 98% 24%
Property Transportation Motor Accident & 89%
Guarantee Liability Engineering Miscellaneous
73% 75% 62% 55% 66% 64%
63%
43% 40%
Health 39% 54% 29%
37%
Property Transportation 39% 32% 29%
25% Motor Accident & 23%Guarantee Liability
22% Engineering24%
Miscellaneous
Cell Captive Insurers’ motor business had a more Health
favourable claims experience in 2013 than the Typical Insurers while the claims
Cellratio
Captive Insurers’
for Property
Accident and motor
Health hasbusiness
Transportation Motor had
decreased a from
slightly more
Accident favourable
Guarantee claims
2012.
& experience
Liability in 2013
Engineering than the Typical
Miscellaneous
Insurers while the claims ratio for AccidentHealth and Health has decreased slightly from 2012.
Cell Captive Insurers’ motor business had a more favourable claims experience in 2013 than the Typical
Insurers while the claims ratio for Accident and Health has decreased slightly from 2012.
Cell Captive Insurers’ motor business had a more favourable claims experience in 2013 than the Typical
Insurers while the claims ratio for Accident and Health has decreased slightly from 2012.
Net Premium Split - Cell Captive Profitability of Cell Captives
Insurers - R'm
Net Premium Insurers % Captive
Split - Cell Profitability
Profitability of of Cell
Cell Captive
Captives
Insurers - R’m
Net Premium
Net Split
Insurers
Premium --Cell
Split% CellCaptive
Captive R 2,000
Insurers
Profitability - R'm
of Cell Captives
Insurers % RInsurers
1,800 - R'm
Insurers % Property R 1,600
R 2,000
R2 000
R 1,400
R 1,800
R1
R 2,000 800
5% R 1,200
10% 1%
Transportation
Property R 1,600
R 1,800
R1 600
0%
Property R 1,600R 1,000
R 1,400
R1 400
5% 5% Motor R R1 R
R 1,400
1,200 800
10% 1% 30% Transportation 200
10% 1%
Transportation R 1,200
R1 R 600
0% 0.4% R 1,000
000
R 1,000 R 400
0%23% Accident & Health
Motor R 800
R800
R 800 R 200
30%30% Motor
R 600
R 600 R600
23% 23% 25% Guarantee
Accident
Accident & Health
Health R 400
R 400 R400R-
Mar- Jun- Sep- Dec-
6% R 200
R 200 R200 13 13 13 13
25%25% Liability
Guarantee
Guarantee R - R -R0
Mar- Jun-
Underwriting Mar- Sep-
Jun- Dec-
Sep- Dec-
6%6% Liability Profit/(Loss)
13
13
R13186 13
13
R 584 13R 699 R 1,122
13 13
Engineering
Liability Underwriting
Underwriting R 186
UW + Investment R 584 R 699 R 1,122
Engineering Profit/(Loss) RR186
186
R 324 RR584
584
R 865 RR699
699 RR11,122
R 1,165 R122
1,759
Miscellaneous
Engineering Profit/(Loss)
Income
UW + Investment
Miscellaneous R 324 R 865 R 1,165 R 1,759
UW + Investment
Income
Miscellaneous RR324
324 RR865
865 RR11,165
165 RR1 759
1,759
Income
Similar to the Typical Insurers profitability
Accident
Accidentand Healthandand
and Health Liability
Liability is significantly
are significantly more more Similar
Similarto
tothe
remains the Typical
Typical Insurers
Insurers,
relatively profitability
profitability
healthy remains
for the Cellrelatively
Captive
Accident and Health and Liability is significantly more remains relatively healthy for the Cell Captiveincome
relevant under
relevant under Cell Captives Insurers. Similar to the Typical Insurers profitability
relevant
Accident underCell
and Health CellCaptives
andCaptivesInsurers.
Liability Insurers.
is significantly more
healthy
Insurers.
for the Cell
Investment
Captive
income
Insurers. Investment
Insurers. Investment income contributed a
contributed a Captive
remains
contributed
noteworthyrelatively
a noteworthy healthy
portion for
to thethe Cell
income of Cell
relevant under Cell Captives Insurers. noteworthy portionportion to the
to the income income
of Cell of Cell
Insurers.
Captives.
Captives. Investment income contributed a
Captives.
noteworthy portion to the income of Cell
Captives.
14 l SAIA n NEW HORIZONSINDUSTRY RESULTS
CAPTIVE INSURERS: 31 DECEMBER 2013
CAPTIVE INSURERS: 31 DECEMBER 2013
Claims Ratio:
Claims Captive
Claims
Insurers
Ratio: Captive
Ratio: Insurers
Captive Insurers
CAPTIVE INSURERS: 31 DECEMBER 2013
2011 2012 2013
2011 2012 2013
126% 126%
95%Claims Ratio:
92% Captive Insurers
91% 91% 76%95%
92%76%79% 79%
88% 88%
73%
73% 57% 57% 63%
63%
2011 2012 2013 40%
40%
34% 35% 34% 35%
23% 23% 13% 13%34% 34% 29%29%
11% 126%11% 4% 4%
0% 0%
91% 95% 76% 92% 88%
Property Transportation 79%&
Property Transportation Motor73% Motor
Accident Accident GuaranteeLiability
&57% Guarantee Liability Engineering
EngineeringMiscellaneous
Miscellaneous
63%
Health -8% 40%
34% 35% Health -8% 13% 34% -43% 29%-25%
23%
11%
0%
-43% -25% 4% -68%
-68%
Property Transportation Motor Accident & Guarantee Liability Engineering Miscellaneous
Captive Insurers experience a very high claims year Health
in their Property business class and also-25%
normalisation of other classes.
Captive Insurer experience in very high claims year in-8% their Property business
-43% class and also normalisation of
Captive Insurer
otherexperience
classes. in very high claims year in their Property business class and also normalisation of
-68%
other classes.
Captive Insurer experience in very high claims year in their Property business class and also normalisation of
other classes.
Net Premium Split - Captive Profitability of Captives
Insurers % Insurers
Profitability - R'm
of Captive
Net Premium Split - Captive Property
Profitability of Captives
Insurers - R’m
Insurers %
NetPremium
Net Premium
Split - Split - Captive
Captive Insurers % Insurers -
R 400 R'm
Profitability of Captives
Transportation R 300
Property
0% 2% Insurers % 400 Insurers - R'm
R R400
Motor
Property R 200
Transportation RRR300
400
300
0% 2% 41% 32% Accident & Health
Transportation R 100
0.3%
0% 2% Motor RRR200
300
200 R-
Guarantee
Motor R 200
32% 16% Accident & Health R R100
100
R -100
41% 32% 2% Accident & Health
Liability R 100
41%
Guarantee
RR -R0
-R -200
Guarantee
Engineering
16%
2% 5% 16% R-100R -300
R(R100)
-100
2% 2%
Liability Liability
Miscellaneous
Mar- Jun- Sep- Dec-
R-200
-200
R(R200) 13 13 13 13
Engineering
2% 5% Engineering Underwriting
R -300
2% 5% R(R300)
-300 Mar-
Profit/(Loss)
R -264
Jun- RSep-
57 RDec-
147 R 240
Miscellaneous Mar-
13 13Jun- 13 Sep-13 Dec-
Miscellaneous UW + 13 13 13 13
Underwriting
Investment
R -264 R -233
R 57 RR109
147 RR 228
240 R 348
As expected
As expectedfrom CaptiveInsurers,
from Captive Insurers, Liability
Liability is theclass
is the largest largest Profit/(Loss)
Underwriting
Income (R264)
R -264 RR57 57 RR147
147 RR240
240
classof of business atof41% Profit/(Loss)
UW +
business at 41% Net of Net Premium.
Premium. Investment R -233 R 109 R 228 R 348
As expected from Captive Insurers, Liability is the largest UW +
Income
class of business at 41% of Net Premium. An Investment (R233)
analysis of assets RR109
R -233 has 109 RR228 RR348
228 a movement
indicated 348
As expected from Captive Insurers, Liability is the largest Income
away from equity over the last year that has had
class of business at 41% of Net Premium. An analysis of assets has indicated a movement
a slightly impact on the profitability of Captives.
An analysis
away from of equity
assets has indicated
over a movement
the last year thataway has from
had
Anequity
aanalysis
slightly oflast
over impact
the assets
on the
year has
that hasindicated
profitability aCaptives.
movement
had a slightofimpact on the
away fromofequity
profitability Captives.over the last year that has had
a slightly impact on the profitability of Captives.
Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.
NEW HORIZONS n SAIA l 15TYPICAL INSURERS: 31 DECEMBER 2013
TYPICAL INSURERS: 31 DECEMBER 2013
TYPICAL INSURERS: 31 DECEMBER 2013
Claims
Claims Ratio:Typical
Ratio: Typical Insurers
Insurers
Claims Ratio:
TYPICAL INSURERS: 31 DECEMBER 2013 2011
Typical
2012
Insurers
2013
67% 68%2011 2012 2013
65% 63% 66% 67% 63%
59% 67% 60% 68% 57%
65% 52%63% Claims Ratio: Typical Insurers
66% 67%
52%
48%
54%
49% 63%
49%
59% 44% 60% 39% 39%
57%
52% 54%
52% 38% 39% 37% 48% 49% 49%
44% 2011 36% 39%
2012 201339%
38% 39% 28%
67% 68% 36% 37%
65% 66% 67% 28%
63% 63%
59% 60% 57% 54%
52% 52% 49% 49%
48%
44% 39% 39%
38% 39% 37%
Property Transportation Motor 36%
Accident & Guarantee Liability Engineering Miscellaneous
28%
Property Transportation Motor Health
Accident & Guarantee Liability Engineering Miscellaneous
Health
Typical insurers experienced an increase in claims for most of the business classes during the 2013 year, especially Liability and
Typical insurer
Miscellaneous experienced
were
Property much higheran
Transportation
increase
than inAccident
claims
normal, albeit
Motor
forGuarantee
mostare
those&businesses of small
theLiability
business classes
in comparison during
with the
Engineering
the 2013
total insurance
Miscellaneous
year
business
especially
Typical insurer
written. Liability and
experienced Miscellaneous
an increase were
in claimsmuchfor
Health higher
most than
of the normal
business albeit those
classes businesses
during the 2013 are
yearsmall in
comparison
especially to the
Liability andtotal insurance business
Miscellaneous were much written.
higher than normal albeit those businesses are small in
comparison to the total insurance business written.
Typical insurer experienced an increase in claims for most of the business classes during the 2013 year
especially Liability and Miscellaneous were much higher than normal albeit those businesses are small in
comparison to the total insurance business written.
Net Premium Split - Typical Profitability of Typical Insurers -
Profitability of Typical
Net Premium Split -%Typical
Insurers Profitability R'm
of Typical
Insurers - R’bn Insurers -
Insurers % - Typical
Net Premium Split - Typical R 5,000 R'm bnInsurers -
Net Premium Split
Insurers %
Profitability of Typical
R 4,500
Insurers % R 5,000 R5 R'm
R 4,000
3% Property R 4,500
R 3,500
R 5,000
R 4,000
3%1% 4% 1% Property R 3,500
R4
R 4,500R 3,000
2% Transportation R 4,000R 2,500
1% 3% 4% 1% Property R 3,000
R 3,500 R3
R 2,000
2% 1% 33% Transportation
Motor R 2,500
1% 4% R 3,000R 1,500
2%
33%
Transportation
Motor
Accident & Health
R 2,000
R 2,500 R2
R 1,000
33% R 2,000
R 1,500
Motor
R 1,500 R 500
54% Accident & Health
Guarantee R 1,000 R1
R-
Accident & Health R 1,000
R 500
R 500 Mar- Jun- Sep- Dec-
54% 54%
R - R -R0
2% Guarantee
Liability
Guarantee 13 13 13 13
Mar- Mar-
Jun- Jun-
Sep- Sep-
Dec- Dec-
2%2% Liability
Engineering
Liability Underwriting13 1313
R 527 1313
R 1,365 13
13R 2,405 13R 1,806
Profit/(Loss)
Engineering
Engineering
Miscellaneous Underwriting R 527 R 1,365 R 2,405 R 1,806
Underwriting
R0.5 R1.4 R2.4 R1.8
UW + InvestmentR 527 R 1,365 R 2,405 R 1,806
Profit/(Loss)
Profit/(Loss)
Miscellaneous
Miscellaneous R 1,102 R 2,648 R 4,278 R 4,521
Income
UW + Investment
UW + Investment R 1,102 R1.1
R 2,648 R 4,278 RR4.3
4,521
Income R 1,102 RR2.6
2,648 R 4,278 RR4.54,521
Income
Motor, Property and Guarantee equates to more than 90% of Profitability remains remains
Profitability relatively healthy for thehealthy
relatively Typical Insurers
for the
Motor,
the Property
Motor,
total Property
Net and
andGuarantee
Premium ofGuarantee equatestoto
equates
Typical Insurers. more
more than Profitability
than
remains relatively healthy for the
as a whole. However, natural disasters such as the hail storms
Typical
Profitability
Typical Insurers Insurers
remains asrelatively
as a whole. a However
whole. However
healthy
natural for natural
the
90%90%
Motor, of the
Property total
of the Net
and
total Premium
Guarantee
Net ofTypical
Premiumequates
of Typical
to Insurers.
more than
Insurers. in Gauteng during the hail
fourth quarter ofGauteng
2013 had a substantial
disasters
Typical
disasters such
Insurers
such as the asasathe
whole.hailinHowever
storms storms in natural
Gauteng
90% of the total Net Premium of Typical Insurers. impactthe
during on fourth
underwriting
quarterprofit.
of 2013 had ain Gauteng
during
disasters the fourth
such as thequarter
hail of 2013
storms had a
substantial impact
substantial on
impactunderwriting profit.
on underwriting
during the fourth quarter of 2013 had aprofit.
Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
substantial impact on underwriting profit.
Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.
16 l SAIA n NEW HORIZONSINDUSTRY RESULTS
NICHE INSURERS: 31 DECEMBER 2013
NICHE INSURERS: 31 DECEMBER 2013
NICHE INSURERS: 31 DECEMBER 2013
Claims
Claims
ClaimsRatio:
Ratio: Nichè
Ratio: Insurers
Niche Insurers
Nichè Insurers
NICHE INSURERS: 31 DECEMBER 2013
2011 2012 2013
2011 2012 2013
327%
Claims Ratio: Nichè Insurers 327%
2011 2012 2013 123%
123%
53% 61%
41% 48% 51% 49% 34%53%
52% 41% 36% 18%
327% 54% 35% 43%
61% 15% 15% 18%
36% 31%
41% 54% 35%
13% 19%
48% 51% 49% 34% 52% 41% 36% 18% 43% 15% 15% 18%
36% 31%
13% 19%
Property Transportation Motor Accident & Guarantee Liability Engineering Miscellaneous
Property Transportation Motor Accident & Guarantee
-1% Liability 123%
Engineering Miscellaneous
Health
Health
53% -1% 61%
41% 48% 49% 34% 52% 41%
51% except 36% 18% 54% 35% 43% 15% 15% 18%
A very 31% year for Niche
36%stable Insurers, for an increase in claims in the Engineering Class.
13% 19%
A very stable year for Niche Insurers except for an increase in claims in the Engineering Class.
A very stableProperty
year for Transportation
Niche Insurers Motor
except forAccident
an increase
& in claims in Liability
Guarantee the Engineering Class.
Engineering Miscellaneous
Health -1%
A very stable
Net Premium Split - Nichè Profitability of Nichè Insurers -
Profitability of Niche
Net year for NicheSplit
Premium Insurers except for an increase in claims
Insurers-%NichèProperty
in the Engineering
Profitability
Profitability ofNiche
of Nichè
InsurersR'm
Class.
Insurers--
Insurers
- R’bn
R’bn
R'm
Insurers % Property R 6,000
Transportation
Net Premium Split - NicheTransportation
R 6,000R6
11%
Net Premium Split - Nichè Motor Profitability
R 5,000 of Nichè Insurers -
1% Insurers %
8% 11%
1% Insurers %
38%
Motor
Accident &
R 5,000R5 R'm
8% Property
R 4,000
38% Health
Accident &
14% Health Guarantee
Transportation RR4,000
6,000
R4
21% Guarantee R 3,000
14% 11% Liability
Motor R 5,000
1%21% R 3,000R3
8% Liability
38%7% 0% Accident &
Engineering R 2,000
R 4,000
0% Health
Engineering R 2,000R2
14% 7% Guarantee
Miscellaneous
21% R 1,000
R 3,000
Miscellaneous
Liability R 1,000R1
0.3%
7%
0% Engineering R 2,000R - Mar- Jun- Sep- Dec-
R -R0
Miscellaneous Mar- 13 Jun- 13 Sep- 13 Dec- 13
R 1,000
Underwriting 13 13 13 13
A much more event split of business as expected from Profit/(Loss)
R 852 R 1,724 R 2,629 R 3,338
Underwriting
A much Amore
Niche much event
Insurers splitsplit
each
more even ofofbusiness
specialist
business asexpected
expected
inasdifferent from from
classes.
Niche R-
Profit/(Loss)
UW + Investment
R0.9
R 852 RR1.7
1,724 RR2.62,629 RR3.3
3,338
Mar-
R 1,170Jun-R 2,423
Sep-R 3,736
Dec-R 4,792
Niche Insurers each specialist in different classes.
Insurers, each a specialist in different classes. Income
UW + Investment 13 13 13 13
RR1.2
1,170 RR2.4
2,423 RR3.73,736 RR4.8
4,792
Income
Underwriting
A much more event split of business as expected from Profit/(Loss)
R 852 R 1,724 R 2,629 R 3,338
Niche Insurers each specialist in different classes. Similar
Similar toUW
to theInsurers,
the+Typical
Typicalprofitability
Investment Insurers profitability
R 1,170 R 2,423 remains
R 3,736 relatively
R 4,792
remains
Similar to the relatively
Typical
Income healthy
Insurers
healthy for the Niche Insurers. for the Niche Insurers.
profitability
remains relatively healthy for the Niche Insurers.
Similar to the Typical Insurers profitability
remains relatively healthy for the Niche Insurers.
Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.
NEW HORIZONS n SAIA l 17,, When the Paris Exhibition (of 1878)
closes, electric light will close with it
and no more will be heard of it.
,,
- Oxford professor Erasmus Wilson
18 l SAIA n NEW HORIZONSYou can also read
