{"id":8853,"date":"2021-04-23T15:56:02","date_gmt":"2021-04-23T15:56:02","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/?p=8853"},"modified":"2021-04-23T15:30:15","modified_gmt":"2021-04-23T15:30:15","slug":"insurers-lose-billions-amid-covid-19-says-pwc","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/insurers-lose-billions-amid-covid-19-says-pwc","title":{"rendered":"Insurers lose billions amid Covid-19, says PwC"},"content":{"rendered":"

Africa-Press<\/a> – South-Africa<\/a>. <\/strong><\/span>DURBAN – ALTHOUGH major life insurers lost billions in profit due to Covid-19 and the challenging macro-economic uncertainty, they have remained resilient while delivering credible financial results, says PwC.<\/p>\n

Yesterday, in the report \u201cHumanity and innovation: The new tomorrow for insurers\u201d, PwC analysed the life insurers\u2019 results for December 31 last year.<\/p>\n

Alsue du Preez, the insurance leader for PwC Africa, said life insurers were the bearers and expert managers of the risks, and their results for 2020 demonstrated how they had performed during an unprecedented and challenging year.<\/p>\n

PwC\u2019s analysis presented the combined results of Discovery Holdings, Liberty Holdings, Momentum Metropolitan Holdings, Old Mutual and Sanlam.<\/p>\n

The insurers posted a total comprehensive loss of R870 million compared to the profit of R22.1 billion reported in 2019, which reflected the higher levels of mortality claims and the challenging macroeconomic environment of last year.<\/p>\n

In the first half of last year, the industry was said to have reacted to the Covid-19 pandemic by modifying its assumptions about mortality claims and lapses in the short-to-medium term, due to the disease and the impact of the lockdowns on consumers.<\/p>\n

The pandemic and the economic climate resulted in the top five insurers losing R8bn of value last year, compared with the R32bn created in 2019. The combined group embedded value\/equity value (EV) of the insurers fell by 9 percent over the past year.<\/p>\n

The decline in EV was said to be driven largely by the assumption changes made to allow for the expected adverse claims and persistency experience (Covid-19 reserves), as well as the poor investment experience and changes to interest rates over the year. It was also notable that the value created from selling new business last year was only 63 percent of that achieved in 2019 as a result of the lockdowns.<\/p>\n

Earlier this month, the Association for Savings and Investment South Africa said life insurers paid more than R0.5 trillion rand to policyholders and beneficiaries last year. This represented an increase of R31.7bn from the R491bn injected into the economy in 2019 through payments made to policyholders and beneficiaries.<\/p>\n

In response to the impact of Covid-19, the companies raised significant reserves. By far the biggest contributor to the R15bn increase in reserves related to expected mortality claims over the near term. Insurers also impaired non-financial assets to the value of R17.1bn.<\/p>\n

The industry expected recovery to pre-Covid-19 profitability levels over the next 18 to 24 months, by accelerating digital investment such as direct-to-customer engagements, automated advice, digital underwriting and cloud and cybersecurity coverage capabilities.<\/p>\n

Du Preez said that was similar to the findings of PwC\u2019s Annual Global CEO Survey 2021 in which 62 percent of the insurance chief executives noted that they planned to significantly increase investment in digital transformation in the short term.<\/p>\n

Other areas of increasing investment by insurers were cybersecurity and data privacy, at 40 percent; initiatives to realise cost efficiencies, at 33 percent; leadership and talent development, at 31 percent; and sustainability and ESG initiatives, at 21 percent.<\/p>\n

PwC Africa said the industry was also clearly focused on how to come back stronger after the crisis while carefully monitoring the development of mortality claims in the near term.<\/p>\n

[email protected]<\/p>\n

BUSINESS REPORT<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. DURBAN – ALTHOUGH major life insurers lost billions in profit due to Covid-19 and the challenging macro-economic uncertainty, they have remained resilient while delivering credible financial results, says PwC. Yesterday, in the report \u201cHumanity and innovation: The new tomorrow for insurers\u201d, PwC analysed the life insurers\u2019 results for December 31 last year. […]<\/p>\n","protected":false},"author":84,"featured_media":8852,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[274,315,275],"class_list":["post-8853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nInsurers lose billions amid Covid-19, says PwC - South Africa<\/title>\n<meta name=\"description\" content=\"DURBAN - ALTHOUGH major life insurers lost billions in profit due to Covid-19 and the challenging macro-economic uncerta ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/insurers-lose-billions-amid-covid-19-says-pwc\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Insurers lose billions amid Covid-19, says PwC\" \/>\n<meta property=\"og:description\" content=\"DURBAN - 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