LEGALLY SPEAKING – Removing barriers to entry will be crucial to growing SA’s insurance sector
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GUEST – Vis Govender, Co-founder of Everything.Insure
the face of it, South Africa has a robust and competitive insurance sector. Though there may be more than 170 or so companies playing in the insurance space, if you dig a little deeper, it becomes evident that it’s actually quite concentrated and difficult to break into this sector as a new entrant.
A 2021 paper from KPMG, for instance, found that 21 life insurers account for 88% of the total market. Of those, the top five life insurers account for 82% of the market’s total assets. Things aren’t much different in the short-term insurance space, where Santam alone accounts for more than 22% of all market share. In the long term, those levels of concentration may have negative consequences for both industry growth and innovation. It’s therefore critical for the industry’s future that barriers to entry are overcome, making it easier for new insurers and brokers alike to enter the sector. One of the biggest such barriers is regulatory compliance. As Vis Govender, Co-founder of Everything.Insure and Group CEO of firstEquity Group, notes “that’s not to say regulation and the enforcement of compliance aren’t important.”
the face of it, South Africa has a robust and competitive insurance sector. Though there may be more than 170 or so companies playing in the insurance space, if you dig a little deeper, it becomes evident that it’s actually quite concentrated and difficult to break into this sector as a new entrant.
A 2021 paper from KPMG, for instance, found that 21 life insurers account for 88% of the total market. Of those, the top five life insurers account for 82% of the market’s total assets. Things aren’t much different in the short-term insurance space, where Santam alone accounts for more than 22% of all market share. In the long term, those levels of concentration may have negative consequences for both industry growth and innovation. It’s therefore critical for the industry’s future that barriers to entry are overcome, making it easier for new insurers and brokers alike to enter the sector. One of the biggest such barriers is regulatory compliance. As Vis Govender, Co-founder of Everything.Insure and Group CEO of firstEquity Group, notes “that’s not to say regulation and the enforcement of compliance aren’t important.”
