Long-term Insurance Leader for Pwc Africa, Victor Muguto says the expansion into the rest of African continues to be a key trend, with most of the major insurers focusing on selected high growth markets.
He said according to the survey the top three markets for expansion by South Africa were identified as Kenya, Nigeria and Ghana.
Given the low GDP growth outlook for 2014 and 2015 in South Africa, expansion to high growth countries in Africa is considered a key strategic driver over the next five years.
Muguto says insures are attracted by projections of strong GDP growth, low insurance penetration rates and the expected increase in demand for insurance. However he indicated that the increasing onerous regulatory burden was cited as a significant barrier to entry into all three countries.
Most insurers predicts growth growth in the 7% to 10% range for 2014 and annually through to 2017 in the local market and large insurers are targeting growth from else where in Africa. Only few large insurers have ventured into fast growing markets in Asia such as India and China.
“The survey comes at a time when South African insurers are grappling to adapt to a declining local economy and heavy regulatory requirements. It is encouraging to see South African insurers remaining well capitalised, financially sound and confident about the future growth under the circumstances,” says Muguto.
He said globally the most important technological advances in the insurance sector over the next three years were identified as the increasing digital economy and data analysis, fuelled by the interest and mobile devices explosion. Muguto says 79% of insurers acknowledged the need to develop strategies to deal with these technological advances. However it is interesting to note that only a third have made a concrete plans to address the impact of mobile technology, social media, sensor technologies, big data analytics, cloud computing and the wide digital economy.