Number of life insurance policies in SA declined in first half, says Asisa
The Association for Savings and Investments SA says life insurers have paid out more than R1bn in premium relief to clients amid Covid-19
SA life insurers have seen an overall decline in policies in force as lapses were greater than new policies bought in the first half of 2020, according to the Association for Savings and Investments SA (Asisa).
At the end of June 2020, there were 41.3-million individual recurring premium policies in force, compared to 42.5-million at the end of December 2019, representing a decline of 2.85%, Asisa said in a statement.
Asisa life and risk board committee deputy chair Hennie de Villiers said while this is concerning, it does not come as a surprise given the impact of the Covid-19 lockdown on the earning ability of thousands of South Africans.
“When times are tough consumers are less likely to take out new savings policies,” De Villiers said. “At the same time, more policyholders surrender their savings policies to access their savings due to financial hardship.”
SA life insurers provided more than 458,000 policyholders with premium relief assistance to the value of more than R1bn between March and July in an effort to help policyholders whose earnings were impacted by the Covid-19 lockdown preserve their risk cover and savings policies, Asisa said.
Life insurers also paid claims and benefit payments of R230bn to policyholders and their beneficiaries in the first half of the year.
The industry had free assets of R330bn, which is more than double the reserve buffer required by regulations.
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