Insurance lapse rates ‘set to rise’, says MMI
SOUTH Africa’s third-largest life insurer has warned of a possible increase in lapse rates as consumers come under pressure to keep up with the payment of insurance premiums.A lapse is the cancellation of insurance cover due to the nonpayment of premiums.MMI Holdings CEO Nicolaas Kruger said in an interview last week that there was evidence that the pressure on consumers was worse than it was a year ago. He said depressed insurance sales could affect premium growth in the future.His comments confirm the latest insurance confidence survey released last week by Ernst & Young, which said confidence in the life insurance sector had slipped during the third quarter of this year to its lowest in three years. This contrasted with improving confidence levels among retail and investment bankers and asset managers.Low confidence levels in the life insurance sector have raised the spectre of an increase in lapse rates similar to that experienced in the last recession which hit the bottom line ...
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