According to sales figures published this week by the Association for Savings and Investment South Africa, consumers committed new recurring premiums worth R710m ($100m, €70m) towards their retirement in the first six months of this year. This is a 22% increase on the second half of last year and a 30% increase over the same period last year.
Peter Dempsey, deputy chief executive officer of the ASISA, said the increase in new recurring RA premiums was a continuation of the surge experienced last year when consumers committed R1.1bn in new recurring premiums to RAs – 7% more than in 2009.
However, the same was not true for single premium RA business which experienced a drop of 12% in the first half of this year.
Furthermore, ASISA said it was “worrying” that the risk industry – selling policies covering death, disability and disease – recorded a fall of 11% in new premiums during the first half of the year.
“Considering that South Africans were already underinsured by a shocking R18.4trn last year, a drop in the sales of life and disability insurance is of grave concern,” said Dempsey.
“This means that much work remains to be done by our industry to ensure that more people get to benefit from the financial protection offered by life and disability cover."
Despite the fall in new premiums, overall the life industry experienced a solid first half of the year, with total new premiums (recurring and single) showing an increase of 7% to R37.2bn compared to the previous half year. This was much higher than inflation over the period which was about 4%.
Policyholders also maintained and increased their in force recurring premiums. Total recurring premiums for existing business increased by 2% in the first six months of this year to R38bn.
