Here’s Why Premiums Will Be Going Up

The last thing any of us want right now is to know that the cost of our short-term insurance will be going up. Perhaps we can add to the old axiom that says nothing in life is certain except for death, taxes… and premium increases. But, due to environmental and infrastructure challenges, we expect to see an increase in insurance prices.

In a recent article on Business Tech, our country is now considered “very risky” due to mounting flood and fire dangers, as well as risks to people and infrastructure.

Sanlam, Africa’s most prominent insurance group, has seen rising claims stemming from rolling blackouts and growing costs relating to crime.

“I think it could push premiums anything up to 5% depending on the type of cover that you have, and doesn’t sound like a lot but remember when you’re already facing big inflationary increases, and you have to add that on top, it can be quite debilitating for consumers,” Paul Hanratty, Sanlam CEO, said in a recent interview with Bloomberg.

This situation has been exacerbated by increased costs of risk cover, particularly in South Africa, where there were significant losses from the start of Covid-19.

Hanratty also said that whilst none of the reinsurers of Sanlam have pulled out, the biggest and most influential for product sentiment have indicated that they are going to reduce cover, and some have indicated as much as a 50% reduction in the cover that they will provide to South Africa.

“I think the economy will recover slowly, and I do expect to see some growth coming back, but the problem is the surge in inflation, energy prices and so on is putting consumer incomes under pressure,” Hanratty said. “Consumption, but also the savings rate, is going to come under enormous pressure.”

At Olea South Africa, previously Apio group, we are able to assist you with all your financial planning, not just your risk cover. For the months ahead, if you’re feeling the pinch of the purse strings, please don’t wait until your assets are exposed, or your financial plan becomes vulnerable, to reach out and chat with us about a risk assessment or review.

Our whole team is on hand to help you plan ahead and avoid or reduce unnecessary expenses, losses and stress.