FINANCIAL SERVICES BOARD INSURANCE DIVISION

Transcription

1 Page1 FINANCIAL SERVICES BOARD INSURANCE DIVISION THE QUARTERLY REPORT ON THE RESULTS OF THE LONG-TERM INSURANCE INDUSTRY FOR THE PERIOD ENDED 31

2 Page2 TABLE OF CONTENT SPECIAL REPORT ON THE RESULTS OF THE LONG-TERM INSURANCE INDUSTRY...3 Summary of the results of the primary long-term insurance industry (excluding reinsurers) for the years ended to and the first 3 months of :...3 Industry results - Typical insurers (typical insurers, for the purpose of this report, are those insurers who offer most of the six classes of business as defined in the act, in the primary market)....6 Industry results - Niche insurers (niche insurers, for the purpose of this report, are those insurers who conduct business in a specific target market)....9 Industry results - Cell captive insurers (cell captive insurers, for the purpose of this report, are those insurers who conduct business on a cell captive basis only) Industry results - Linked investment insurers (linked investment insurers, for the purpose of this report, are those insurers who underwrite policies whereby the value of the policy is directly linked to the value of the assets invested in, and no guarantees are offered) Industry results Reinsurers (reinsurers, for the purpose of this report, are those insurers who conduct only professional reinsurance and are not involved in marketing to the public) Industry results - Assistance insurers (assistance insurers, for the purpose of this report, are those insurers who offer life policies where the sum assured does not exceed R18 000)

3 Page3 SPECIAL REPORT ON THE RESULTS OF THE LONG-TERM INSURANCE INDUSTRY Summary of the results of the primary long-term insurance industry (excluding reinsurers) for the years ended to and the first 3 months of : a 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Number of policies increase (yr to yr) % Individual lapse %** Individual lapses % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) a During, there was reclassification of companies. As a result one niche insurer was reclassified as a typical insurer. * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

4 Page4 Classes of policies These diagrams indicate the net premiums according to the classes of policies of typical insurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for primary insurers (excluding reinsurers) for the long-term insurance industry were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

5 Page5 CAR cover ratios - primary insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the primary insurers: Number of insurers FREE ASSETS TO CAR Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

6 Page6 Industry results - Typical insurers (typical insurers, for the purpose of this report, are those insurers who offer most of the six classes of business as defined in the act, in the primary market). b 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % 2 21 (3) Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* Number of policies increase (yr to yr) % Individual lapse %** Individual lapse % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) b During, there was reclassification of companies. As a result one niche insurer was reclassified as a typical. * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

7 Page7 Classes of policies These diagrams indicate the net premiums according to the classes of policies of typical insurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for typical insurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

8 Page8 CAR cover ratios - Typical insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the typical insurers: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

9 Page9 Industry results - Niche insurers (niche insurers, for the purpose of this report, are those insurers who conduct business in a specific target market). 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % (20) c Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* d Number of policies increase (yr to yr) % (25) 32 5 Individual lapse %** Individual lapse % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) c During, there was reclassification of companies. As a result one niche insurer was reclassified as typical. * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

10 Page10 Classes of policies These diagrams indicate the net premiums according to the classes of policies of niche insurers for the first 3 months of as well as comparative figures for the first 3 months of : Note: The change in the spread of premium was a result of one niche insurer reclassified as a typical insurer during. Investment spread The spread and categories of assets for niche insurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

11 Page11 CAR cover ratios - Niche insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the niche insurers: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

12 Page12 Industry results - Cell captive insurers (cell captive insurers, for the purpose of this report, are those insurers who conduct business on a cell captive basis only). 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % (6) Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* e Number of policies increase (yr to yr) % Individual lapse %** Individual lapse % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** (4) 8 13 Fund & group schemes termination %** CAR cover ratio (median) e * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

13 Page13 Classes of policies These diagrams indicate the net premiums according to the classes of policies of cell insurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for cell insurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

14 Page14 CAR cover ratios - Cell insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the niche insurers: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

15 Page15 Industry results - Linked investment insurers (linked investment insurers, for the purpose of this report, are those insurers who underwrite policies whereby the value of the policy is directly linked to the value of the assets invested in, and no guarantees are offered). 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* f Number of policies increase (yr to yr) % Individual lapse %** Individual lapse % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) f * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

16 Page16 Classes of policies These diagrams indicate the net premiums according to the classes of policies of linked insurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for linked insurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

17 Page17 CAR cover ratios - Linked insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the linked sector: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

18 Page18 Industry results Reinsurers (reinsurers, for the purpose of this report, are those insurers who conduct only professional reinsurance and are not involved in marketing to the public). 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Performance indicators: Net premium increase (year to year) % Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* g Number of policies increase (yr to yr) % Individual lapse %** Individual termination %** Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) g * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

19 Page19 Classes of policies These diagrams indicate the net premiums according to the classes of policies of reinsurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for reinsurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

20 Page20 CAR cover ratios - Reinsurers insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the reinsurance sector: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times

21 Page21 Industry results - Assistance insurers (assistance insurers, for the purpose of this report, are those insurers who offer life policies where the sum assured does not exceed R18 000). 3 months ended Gross premium R m Reinsurance R m Net premiums- Recurring R'm Net premiums- Non-recurring R'm Net claims paid R m Total assets R m Total liabilities R m CAR amount (after management action) R m Number of policies at the end of period Number of schemes at the end of period Performance indicators: Net premium increase (year to year) % Claims (as % of net premiums) Commission (as % of net premiums) Management Expenses (as % of net premiums) Investment yield %* h Number of policies increase (yr to yr) % Individual lapse %** Individual lapse % (in-force policies) Individual termination %** Individual termination % (in-force policies) Individual contractual termination %** Individual expiry %** Fund & group schemes termination %** CAR cover ratio (median) h h * Return on investment is calculated according to the formula R=2i/A+B-i where i is all investment income plus realised and unrealised surplus on sale of investments, A is initial value of investments and B is end value of investments. **Expressed as a percentage of the number of new policies issued during the period.

22 Page22 Classes of policies These diagrams indicate the net premiums according to the classes of policies of assistance insurers for the first 3 months of as well as comparative figures for the first 3 months of : Investment spread The spread and categories of assets for assistance insurers for the years ended to and for the first 3 months of were as follows: Kinds of assets 3 months ended In South Africa: R million % R million % R million % Cash and deposits Government and semi-government Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets Debtors Other assets Total

23 Page23 CAR cover ratios - Assistance insurers The ratio of surplus assets to capital adequacy requirement (CAR) gives an indication of the financial strength of a long-term insurer. The following table gives an indication of the financial strength of the assistance sector: FREE ASSETS TO CAR Number of insurers 2010 Covered 0-1 times Covered 1-2 times Covered 2-5 times Covered 5-10 times Covered 10+ times