With a higher crime rate than most countries you can expect to pay more for insurance in South Africa whether it be car, household or life insurance. In the last decade South Africa has seen an increase in insurance companies and insurance products being offered. And despite some of the challenges South Africa faces there is still a rise in competition.
Competition amongst insurance companies has also increased and this is great news for the consumer as each insurance company will try and offer the best deals and best services, to the customer.
Competition as in any sector ensures that prices are fair, and that services offered are competitive. Even if premiums are high a consumer can still receive discounts in the form of cash back bonuses as offered by some insurance companies or a consumer may benefit from other deals such as road side assistance. There are over a hundred and fifty registered insurers on the registered insurers list of South Africa.
Although the number of insurance companies has increased and there is a lot of competition amongst them, South Africa does still face a lot of challenges for insurers and insured alike.
Some of unique challenges of insurance in South Africa:
High crime rate: Social conditions and poor management of public safety pose challenges to the local insurance industry as well as the community. With higher crime rates people more people take out insurance yet with a higher crime rate it also means that more people claim against their insurance policy.
Lower income households: The insurance industry focuses on higher income household as lower income households cannot afford insurance. The market is very competitive at the higher income end yet offers little in the way of products for the lower income bracket.
High H.I.V and A.I.D.S rate: Means that those infected with the H.I.V have a higher mortality rate, which proves a bigger risk to insurers. Some other risks include loss of income due to inability to work and the cost of funeral upon death. Insurance companies can assist through the funding of appropriate treatments and by doing so reduce the risk.
High unemployment rate: South Africa has a high unemployment rate meaning that many people face the scary prospect of not being able to pay their premiums. When times are tough economically usually insurance is the first to go as people try to cut cost.
Low natural disaster rate: Unlike other countries such as the United States, South Africa does not experience natural disasters such as earth quakes and hurricanes, which means that people do not take out coverage for these disasters. Insurance companies then need to focus on the other products.
As you can see insurance in South Africa has its own unique challenges for both the insurance company and the insurance customer. Luckily insurance companies are constantly evolving to keep up with the latest trends, offering a cash back bonus if someone does not claim within a specific period is one of the examples. With the rising competition and competitive market people can however still get a good deal for the money.
For the best insurance South Africa visit http://www.afi.co.za/Pages/welcome.aspx.
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