The long-term insurance industry is in good health with the industry now managing assets in excess of R913-billion for the year to June 2005, a 19% increase on the year before, the Life Offices Association said on Thursday.
”Overall the statistics reflect an industry in good health and show that the full range of risk and investment products and services remain viable and in demand,” the association’s executive director, Gerhard Joubert, said.
The total new business premium inflow was up 14% on the comparable six month period in 2004, to R21-billion.
However, new business premiums collected on recurring Retirement Annuity (RA) products over the six months to June 2005 declined by five percent to R660-million when measured against the previous six months to December 2004, and by 21% against the comparable six months to June 2004.
Joubert said recurring RA sales at R660-million only made up about three percent of total new business premium inflows.
”It could be due to the fact that many new generation RA products were introduced in this period and a gap between new product introduction and uptake by the market is to be expected,” Joubert said.
Joubert said the second-half statistics from July to December 2005 would present a clearer picture of the impact of the PFA rulings on new RA sales.
In the category ”Individual Income” — total income, not only new business — single premiums increased 19% over the same period last year and recurring premiums, including recurring Retirement Annuities increased by eight percent.
The portion of recurring premiums made up by recurring RAs increased four percent for the comparable period, but declined five percent against figures for the previous six months.
”The fact that our industry has been able to attract R 4,6-billion of inflows into recurring RA products in the past six months — as against R4,4-billion for the comparable six months, and R4,8-billion for the previous six months — shows there is continued strong demand for this form of contractual saving,” he said. – Sapa