Insurance brokers are losing confidence in the South African economy, according to a survey released on Tuesday.
“… the results for the first quarter of 2011 shows that brokers’ confidence in the outlook for the economy has dropped to 61%, down from 66% recorded during the last quarter of 2010,” CIB Insurance said in a statement on its Broker Confidence Index Survey.
The survey found brokers were continuing to lose confidence in business conditions for the local insurance industry over the next 12 months.
Confidence levels dropped to 62% during the first quarter in 2011, from 67% in the previous quarter.
Jonjon Smit, sales director of CIB Insurance Solutions, said this might indicate the South African economy was not recovering as well as people thought.
Brokers’ confidence in attracting new business over the next 12 months dropped significantly to 71%, from 76% in the previous quarter.
“Insurance brokers tend to obtain new customers at the same time as consumers are purchasing items and are therefore looking to insure them.
“The drop in confidence levels in prospects for the industry and new business suggests that brokers are not expecting a significant pickup in consumer spending,” said Smit.
Brokers were more confident about maintaining their current customer book in 2011, with 79% expressing confidence in their ability to retain existing clients, an increase of 1% since the last quarter.
Brokers said their biggest problem in the next 12 months would be complying with new legislation and regulations. Their main concern was probably the financial services board regulatory exams, Smit said.
“All key individuals and representatives need to complete the first level of the exam, which will cover general compliance, by December 2011. This looming deadline is causing some uncertainty amongst brokers.” — Sapa