Johannesburg - South African life insurers attracted R66.4bn in new individual premiums last year, which represents a 7% increase from 2009 when South Africans bought life insurance products worth R62bn.
Reporting back on the 2010 sales statistics for the South African long-term insurance industry, Peter Dempsey, deputy CEO of the Association for Savings and Investment South Africa (Asisa), said in addition to purchasing new life and disability insurance and savings policies last year, policyholders also maintained and increased their in force recurring premiums.
Total recurring premiums increased by 9% last year from R66.8bn in 2009 to R72.8bn in 2010.
Dempsey said that retirement annuity (RA) funds had had a particularly good 2010.
There was a surge in new recurring and single premiums, with consumers having committed R1.1bn in recurring premiums last year (7% more than in 2009) and R7.5bn in single premiums (29% more than in 2009).
Dempsey said compulsory annuities, which are bought with retirement fund proceeds and offer guaranteed pension payments, were the only products to experience reduced inflows last year.
He attributed this to lower interest rates, which resulted in lower annuity rates. As a result, more people opted to invest their retirement savings in investment-linked living annuities.
New compulsory annuity single premiums decreased by 7% from R5bn in 2009 to R4.7bn last year. Investment-linked living annuities increased 8% from R15bn in 2009 to R16.2bn.
Dempsey said the life industry remains stable and in good health.
"The life industry managed to grow new individual and group business by an inflation-beating percentage last year. Considering that the operating environment remained challenging in 2010 with more than one million jobs lost, these are solid results achieved under tough operating conditions."
Since life companies are key contributors to the savings and investment industry, which is the custodian of the bulk of the country's savings, it is imperative for the long-term insurance industry to remain well positioned to meet the needs of policyholders, investors and shareholders.
Dempsey said that the life insurance industry's total assets increased by 13% to R1.3 trillion at the end of December last year from R1.13 trillion at the end of 2009.
"This means that industry assets now exceed the pre-crisis asset levels of R1.15-trillion held at the end of 2007."
Dempsey said long-term insurance industry assets continued to exceed liabilities by more than double the legal reserve buffer required. This meant that life companies remained well positioned to honour benefit payments due to policyholders.