BMI's Executive Summary

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This report differs from its predecessors in that it includes BMI's Insurance Business Environment Rating (IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI's Country Risk Rating (CRR). It is now much easier to consider the business environment for the insurance sector in any one country relative to the business environment for other industries in that country that are surveyed by BMI, and the business environment for the insurance sector in other countries.

South Africa's IBER is 67.6. Relative to other countries in the Middle East and Africa, it is a an attractive insurance market for foreign insurers, with an established and well developed market. Within the region, South Africa stands out for the size of both the non-life and life segments. While the potential for growth in both these segments exists, it is not as strong as the potential for other countries in the region. Despite political uncertainties, BMI's view is that Government policies are likely to remain constant over the longterm, maintaining the commendable regulatory framework which boosts South Africa's IBER. However, the IBER is held back by the volatility of GDP and the economic outlook, which is in part a function of the sensitivity of the South African economy to external factors.

Over the forecast period, we anticipate that non-life premiums will grow by 14% annually in local currency terms, by 10% in US$ terms and by 11% in EUR terms. Life premiums are expected to increase by 8% annually in local currency terms, by 5% in US$ terms and by 5% in EUR terms. The key driver of the growth in the non-life segment in 2007-2012 is the anticipated rise in nominal GDP from around US$268bn to US$372bn and an expected increase in non-life penetration from 3.04% of GDP to 3.5%. The key driver of the muted growth anticipated in the life segment is the envisaged rise in life density from a miniscule US$503 per capita in 2007 to US$630 per capita in 2012. South Africa's total population is likely to remain steady.

The competitive landscape in the non-life segment is characterised by fierce competition from large local players, but is nonetheless very open to participation by foreign groups – a fact to which South Africa's high score in this category of its IBER attests. Foreign insurers are a small presence generally in the life segments of Middle Eastern and African countries surveyed, and the openness component of South Africa's IBER with regard to the life segment (5 out of a possible 10) reflects this. South Africa's insurance sector is well developed, thanks in no small part to a regulatory framework that is conducive to the development of the sector.

The main weakness of South Africa's insurance sector is the prospect of the impact of slowing growth and possible high inflation impacting upon what is, in global terms, a comparatively low GDP per capita.

Contents of the South Africa Insurance Report

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Chapter 1 - The Sector At A Glance

Table: South Africa Insurance Overview (In Millions Of Currency Specified)

Key Features Of This Report & Likely Future Changes

Chapter 2 - Latest News

Recent Developments

Chapter 3 - Evolution Since The Mid-1990s

Table: Evolution Of The Insurance Sector (In Millions Of Currency Specified)

Evolution

Chapter 4 - Projections And Forecasts

Table: BMI Projections For South Africas Insurance Sector (In Millions Of Currency Specified)

Table: South Africa Insurance Drivers of Growth

Projections And Drivers Of Growth

Chapter 5 - Macroeconomic Outlook

Table: South Africa Economic Indicators

Chapter 6 - Country Update

Political Risk Zuma Trial

Economic Risk Currency Volatility

Business Environment Need For Investment In Education

Chapter 7 - Analysis Of Competitive Conditions

Country Overview South Africa Non-Life Segment

Table: Middle East And Africa Non-Life Segment Rankings of Markets

Table: Middle East And Africa Presence Of Cross-Border Insurers Non-Life

Table: Middle East And Africa Selected Local Non-Life Insurers

Country Overview South Africa Life Segment

Table: Middle East And Africa Life Segment Rankings Of Markets

Table: Middle East And Africa Presence Of Cross-Border Insurers Life Segment

Table: Middle East And Africa Selected Local Life Insurers

Chapter 8 - Regional Context

Table: Middle East And Africa: Regional Context 2004 Premiums

Table: Middle East And Africa Regional Context Total Premiums 2004

Chapter 9 - Methodology And Objectives

Introduction

Background

Forecasts

Chapter 10 - Appendix

Table: Middle East And Africa - Latest Estimates / Actual Figures For 2005

Table: Latest Estimates For 2010

Table: Latest Estimates For 2005-2010 (Growth In US Dollar Terms)

Competitive Landscape for The Middle East and Africa Insurance
    Reports: Sample of Companies Ranked

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A cross-border overview of key players and their insurance market share across the Middle East and Africa. Tables and graphs show country presence of multinationals across the region. Comparative company analyses and rankings by premium income (life and non-life). Company SWOTS for leading life and non-life insurers, covering network of offices, presence of foreign stakeholders, strategic relationships, joint ventures; portfolio of clients; diversity of product range; profit growth, investment strategy and risk exposure.

Network of Insurance Sources

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BMI's Middle Eastern and African Insurance Reports are based on an extensive network of multilateral organisations, government departments, insurance industry associations, chambers of commerce and company reports. Information sources include:

Read about our other Insurance Reports