Kindly leave a comment and share
An increase in the number of uninsured vehicles on South African roads diminishes the likelihood of recoveries from third parties, says global insurance broker Aon in its “Insurance State of the Market 2023” report.
In a section of the report commenting on market trends in motor insurance, Aon highlights the following changes in the market aside from the increase in the number of uninsured vehicles:
Increase in interest rates and exchange rates means it’s more expensive to repair a vehicle.
An increase in the number of uninsured vehicles on South African roads diminishes the likelihood of recoveries from third parties.
Shortages in international supply of semi-conductors and spares impact the time to repair or replace.
Deteriorating road infrastructure is driving an increase in claims.
Vehicle theft has increased with keyless technology being targeted.
A reduction in the number of vehicles that are available for car rental post-COVID is impacting replacement vehicle availability and time.
As for underwriting by SASRIA—the only non-life insurer that provides special risk cover such as for civil commotion, public disorder, strikes, riots, and terrorism — the report notes that commercial risks saw a heavy SASRIA rate increase in 2022.
Meanwhile, SASRIA is requiring more detailed vehicle information for commercial vehicles such as its Gross Vehicle Mass (GVM), seating capacity on busses, and so on. On a bright note, SASRIA’s commission to intermediaries has been reduced from May 2023 to 11.5% – increasing the nett premium to the insurer.
In underwriting, insurers are:
Continuing selective underwriting in light of good risks and large losses.
Homing in on business activities such as location and cross-border exposure.
Requiring strict premium payment conditions.
Source: Middle East Insurance Review