The general insurance industry in South Africa is set to grow at a CAGR of 5.8% from ZAR181.5bn ($9.8bn) in 2024 to $11.2bn in 2028 in terms of gross written premiums.
This is according to GlobalData which also predicted that the general insurance industry in South Africa will grow by 7.7% in 2024. Rising vehicle sales, increasing demand for policies covering natural disasters and increasing cybercrime incidents will inspire this rise.
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Sutirtha Dutta, insurance analyst at GlobalData, said: “The South African general insurance industry grew by 14.7% in 2023, recording the highest growth in the last five years. The growth was supported by strong performance of the key economic sectors such as automobiles, construction, and financial services. However, the growth of general insurance industry is expected to remain subdued in 2024 and 2025 due to slower economic growth.”
Motor insurance is the leading line of business in the South African general insurance industry, which is expected to account for 42.5% share of the general insurance GWP in 2024.
In addition, it is expected to grow by 5.6% in 2024, supported by growing vehicle sales.
According to the Automotive Business Council (NAAMSA), total vehicle sales increased by 6.8% in July 2024 as compared to July 2023.
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By GlobalDataThe growing popularity of electric vehicles (EVs) and new energy vehicles (NEVs) will also support the growth of motor insurance. Sales of New Energy Vehicles (NEV) increased by 82.7% during the first quarter of 2024 as compared to the same period of the previous year.
Dutta added: “Rising premium rates will also support motor insurance growth. The increasing prices for automobiles, frequent nat-cat events, as well as rising cases of vehicle theft and road accidents, have led to an increase in the overall cost of claims for insurers. As a result, insurers are expected to reassess their risk exposure and increase the premium rates for motor insurance. Motor insurance is expected to grow at a CAGR of 6.5% during 2024-28.”
