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Friday, August 1, 2008
Complex times

Short-term insurers selected a new board of directors at the Annual General Meeting of its representative body, the South African Insurance Association (SAIA), on 12th June 2008.

The current Chair of the SAIA Board, Adam Samie, is not available for re-election of the position of Chair due to time constraints, but will remain until the new person is elected.
Samie said that the environment in which insurers operate had changed so much that the association had no choice but to reinvent itself to address a new priority of challenges.
“Our operating environment as short-term insurers has become increasingly complex and challenging, and SAIA’s role in facilitating dialogue and joint decision making between all role players is now more crucial than ever before,” he added.
Samie said that he believed that the current outlook did not look positive with short-term insurers concerned about the current trading environment and the effect on underwriting performance. He believed the personal lines market was showing signs of severe strain, and that there were several factors driving towards a ‘perfect storm’ for personal lines insurers including the depreciation of the rand, ever increasing inflation rates, and the continual rise in the numbers of motor vehicle accidents.
“Ten years ago the cost of accidents amounted to less than 50% of vehicle claims, with crime being the more significant factor. Now, the cost of accidents exceeds 75% of the cost of claims.”
Samie said that he also believed the market had become more challenging for niche players, including the consumer credit insurance providers.

Copyright © Insurance Times and Investments® Vol:21.7 1st August, 2008
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