DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/95232d/south_africa_insur) has announced the addition of the "South Africa Insurance Report Q1 2009" report to their offering.

South Africa Insurance Report provides independent forecasts and competitive intelligence on South Africa's insurance industry.

Late last year, we travelled to South Africa to meet with key clients in the corporate, financial and public sector, as well as to gain a feel for the prevailing economic and political conditions on the ground. While most of our existing views have been confirmed, some analysts we talked to pointed towards increasing risks to economic growth over the course of 2009, mainly in light of the mounting threat of a global recession. Concerns about South Africa's growth potential and macroeconomic stability have been highlighted by Fitch and Standard & Poor's decision to downgrade the country's external credit rating outlook to 'negative' from 'stable' on November 11.

While it is currently not our core scenario that South Africa will slip into a full-blown recession over the course of 2009, the country's open economy and financial markets could be more heavily exposed to the downturn in external conditions than currently anticipated.


Moreover, as mentioned in several meetings, increasing uncertainty surrounding South Africa's future political direction will bode ill for investor confidence and much-needed portfolio inflows over the medium term. This is because at times of high volatility and worsening investor sentiment, any deterioration in South Africa's political conditions and policy credibility will negatively affect the country's financial markets, with likely negative repercussions for the country's real economy. That said, although the rating agencies have also turned negative on some of South Africa's largest financial institutions (Nedbank, Absa and Investec), we believe that the country's robust banking sector will remain a key anchor in the current global storm. Indeed, the fact that South African banks are unlikely to experience many of the problems faced by their American and European counterparts is likely to shield the South African economy from the worst of the downturn in global growth and reduce the probability of a recession.

Since the last quarter, we have made two major changes to the data in this report. First, we have - to the greatest extent possible - incorporated hard figures that have been made available by the regulator(s) and trade association(s) in each country. In some cases, therefore, we have begun to include numbers that pertain to the development of the insurance sector through the early stages of the global financial crisis. Second, we have extended our forecasts out to 2013. In all cases, we have reviewed the key growth drivers - non-life penetration and life density - which we had incorporated in our forecasts. The global financial crisis is likely to affect the various segments of the global insurance industry in different ways. In many countries, especially in Europe, the coming recession points to softness in the non-life segment. In many cases, numbers of policies may fall and there should be downwards pressure on premiums. By contrast, the main problem for the life segment in almost every country is the extreme volatility of financial markets.

Over the longer term however, the fortunes of life insurance will likely recover thanks to the secular growth of organised savings in most countries. China - where the larger insurance companies continue to achieve double-digit growth in premium income - is a good example of this. Some particular niches should also do well in the current environment, such as legal liability insurance. In sub-Saharan Africa, we profile 19 companies. These are AIG, AGF, Allianz, Cardif, Global Alliance, Guardrisk, HDI-Gerling, Hollard, Liberty Group, Metropolitan, Momentum Group, Munich Re, Mutual & Federal, Nedgroup, Old Mutual, OUTsurance, Sanlam, Santam, and Zurich South Africa.

We also look at the particular features of South Africa's insurance market that set it apart from others that we survey. We estimate that, over the course of 2008, total premiums in South Africa rose by 13% to ZAR259,087mn. Non-life premiums rose by 15% to ZAR61,612mn while life premiums rose by 13% to ZAR197,475mn. Between now and the end of the forecast period, we expect that annual non-life premiums will grow by ZAR68,569mn, while annual life premiums should grow by ZAR45,545mn. Growth in non-life premiums should be driven by the general growth of nominal GDP plus a rise in non-life penetration from the current level of 2.78% to 3.50%. Growth in life premiums should be driven by the change in the overall population and a rise in life density from US$519.77 to US$630.00 per capita. Our Insurance Business Environment Rating is 67.6.


Companies Mentioned:

• AGF
• AIG
• Allianz
• Aviva
• AXA
• Cardif
• Ergo
• Eureko
• Fortis
• Generali
• Groupama
• HSBC Insurance
• Liberty Mutual
• MAPFRE
• RSA
• UNIQA
• Zurich

For more information visit http://www.researchandmarkets.com/research/95232d/south_africa_insur.





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Source: Research and Markets