Insurers' losses increasing

JOHANNESBURG -- The situation for the major players in the short-term insurance industry is worsening rather than improving, the chief executive of the South African Insurance Association (SAIA), Barry Scott, said yesterday.

According to unaudited figures, 14 of the 23 insurance companies classified as typical insurers reported underwriting losses from January to March this year, Scott said.

This was compared with only eight for the whole of last year, he added.

"Twelve made an operating loss during this period and the combined underwriting loss was 6% of premium at R210 million, compared to R3m for the period last year.

"Many consumers cannot afford further premium increases. Already, the results so far this year show a reduction in market premium, before inflation is taken into account."

"The areas of major concern remain the motor and fire accounts. Crime continues unabated, while hijackings and vehicle thefts are on the increase. The weakness of the rand has not helped, with many accident replacement parts being imported and paid for in foreign currency."

The industry could not rely on premium increases and had therefore focused on initiatives aimed at achieving a reduction in claims. -- Sapa