There might be some new changes that we may see in the Insurance Industry of South Africa. The key factors being the mental health, climate, and vehicles, according to a survey conducted this year among the Insurance Industries of South Africa. The survey also shows that the need for the new car is very much less among the young generation, however, the transportation companies such as Lyft and Uber have contributed the most to the sales of the country’s imported vehicles.
These factors are not much of a problem for the insurance companies, as vans and cars are still on the road despite their owners. However, this trend might lead to a change in the insurance policies, as the cars purchased are not operated by normal citizens but by the third part company drivers.
The COVID-19 affected the sales of the vehicles very badly and reduced them to a great extent, but the number of sales this year shows that the automotive sector is recovering and getting back on the track as it was before the arrival of the pandemic.
Aside from vehicle insurance, mental health is also a big key factor and is also gaining the attention of many insurance business starters. The main reason being the importance of mental health, if something were to happen to a person’s mental health, it will directly affect the personal life and business of the individual.
Naturally, there will be a great loss of income for that person. Mental health is directly related to the person’s physical health as well. In most serious cases of mental health, the victim suffering from it commits suicide. Climate change was not one of the key factors, but seeing the recent floods and other natural disasters there is a great interest of leading insurance companies in it. Climatic disasters can damage and sometimes even destroy the whole property of the people, Hurricanes being the best example.
To ensure their property, people have to purchase climatic insurance, so if their property gets wiped out, they can receive some aid from the company. However, the rates for climatic insurance are currently low which may have a bad effect on the company.
The rates should increase as the climatic disasters are rapidly increasing and we can clearly see more and more exposure to floods due to the heavy rainstorms. Thus, by the changes in the above factors, there will be a great change in the rates and policies of the insurance companies. Some of them might have to level down a bit, and others need to increase.
In terms of climatic insurance, it can be observed that flooding has been the most common in the last 20 to 30 years. However, the insurance rates are still the same, which need to be increased if a company were to avoid bankruptcy.
Therefore, South African insurance companies will change their policies sometime soon.
