INSURANCE: Confidence Levels Amongst Brokers Pick Up
Recent Western Cape Business News
A recent survey conducted by CIB Insurance Administrators (CIB) has revealed that insurance brokers in South Africa are re-gaining confidence in the South African economy.
The 2011 4th quarter CIB Broker Confidence Index Survey, which measures the confidence levels of insurance brokers on a number of issues concerning the South African economy and insurance industry, showed a 6% increase in broker confidence for the outlook of the economy over the next 12 months to 62% from 56% in the previous quarter. According to Jonjon Smit, Divisional Director at CIB, this jump in confidence is a very encouraging sign for the short term insurance industry going into 2012.
The survey also revealed that brokers are more confident that business conditions for the local insurance industry will improve over the next 12 months, registering a 63% confidence level in the last quarter of 2011 - an improvement of 4% in comparison to the third quarter of 2011.
Brokers are continuing to gain confidence that they will be able to retain their current customer book over the next 12 months. The survey recorded confidence levels of 80%, up from the 78% recorded in the third quarter of 2011.
According to those surveyed, the biggest challenge facing brokers over the next 12 months will be complying with new legislation and regulations. Smit says that this probably stems from new, looming regulations. When asked where they thought the bulk of their business would originate from in 2012, most brokers cited individuals, followed by SMMEs and corporates.
Smit says the increased confidence levels are consistent with other recently released surveys and economic data. “According to the South African Chamber of Commerce and Industry (Sacci), business confidence index jumped 1,7 points to 99,1 in December, which is the highest level since June 2011.
“Furthermore, Statistics SA’s calculations of liquidations for December shows a year-on-year decrease of 10,8%, from 3992 to 3559, which is also likely to be related to increased confidence levels amongst brokers in the commercial insurance sector,” says Smit.
“Despite new regulations, increasing competitiveness in the insurance industry and a number of concerns around both the local and global economy, respondents are confident that 2012 will be an improvement over the previous year. This is a very encouraging sign for the South African economy and the growth of the insurance sector,” concludes Smit.
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