South Africans fork out cash for life insurance

Madoda Milazi

Madoda Milazi

The life insurance industry's revenue grew by 14percent during the first half of this year compared to the same period last year, despite a slowdown in consumer spending due to high inflation and interest rates.

According to the Life Offices' Association, total premium and investment income increased to more than R124billion from R108,4billion in the same period last year. When compared to the second half of last year, total income increased by one percent.

The 2008 half-yearly statistics for the long-term insurance industry released by the association also show that life insurers attracted new clients during the first half of this year, despite consumers grappling with high interest rates and substantial increases in the cost of living.

This should be good news for the country, especially after a survey commissioned by the association last year revealed that South African families were grossly underinsured by an estimated R10trillion.

Gerhard Joubert, chief executive of the association, said new premiums grew by five percent to R31,9billion between January and June this year, compared to R30,2billion in the second half of last year.

He said life insurance companies put close to R90billion back in the hands of beneficiaries, policyholders and pension fund members as a result of death and disability claims as well as maturity pay-outs and pension, and annuity payments during the first half of the year.