Life industry overcomes Covid-19
SOUTH Africa’s major life insurance companies have proved resilient in facing the unprecedented challenges posed by Covid-19 last year: their solvency ratios have remained within targeted ranges, and they have delivered credible financial results.
This is according to a recent report by auditing group PWC, “Humanity and innovation: The new tomorrow for insurers,” which analysed the results of Discovery, Liberty, Momentum Metropolitan, Old Mutual and Sanlam for 2020.
Alsue du Preez, insurance leader for PWC Africa, says: “The life insurance industry plays a critical role in providing financial stability to individuals, families and employees in the advent of loss of income that may result from the death of a family member, their own disability, illness or retirement. The companies’ financial well-being is influenced by several factors such as (prevalence of) illness and death, financial market conditions, employment and income levels, which impact policyholders’ ability to pay their premiums, and new sales.
“While some of these risks can materialise independently, the Covid-19 pandemic demonstrated what can happen when adverse experiences occur in all these areas. Life insurers are both bearers and expert managers of these risks, and their results for 2020 demonstrate how they performed during an unprecedented and extremely challenging year.”
The insurers posted a total comprehensive loss of R870 million compared with the total comprehensive profit of R22.1 billion reported in 2019. This reflects the higher levels of mortality claims and the challenging macroeconomic environment of 2020.