THE OUTLOOK FOR SA’S MAJOR LIFE INSURERS
as the end of 2020 fast approaches and global economies attempt to recover from the economic fallout of government-mandated lockdowns, Covid-19 continues to remain a threat to the world’s population as many countries brace for a second season of disease and death. Lest we forget that the Great Flu of 1918 and the Hong Kong Flu of the late 1960s took two seasons to mutate themselves into oblivion. Indications are that South Africans will experience a second peak in infection at the height of the summer in January or February 2021. The northern hemisphere is currently grappling with its second surge in infections.
Amid this pandemic, life insurers play a key role in ensuring the financial posterity of families affected by the disease. The importance of life insurers during a time of crisis, such as this, can’t be more clearly illustrated than by the date on which the Suid-Afrikaanse Lewens Assuransie Maatskappij Beperk (Sanlam) was founded: 8 June 1918. According to the US Centers for Disease Control and Prevention, the first signs of the Great Flu, also called the Spanish Flu, were recorded in military personnel in the Spring of 1918 – a month or two before Sanlam’s founding.
This is not to imply that Sanlam was founded due to the Great Flu (which was an avian influenza and labelled the H1N1 virus in later times), but one can stand to reason that the scare of death boosted an infant company, which is today the fourth-largest listed financial services business on the JSE.
Life insurers take on the risk of longevity – how long an insured will live – in return for a regular premium and undertakes, legally, to pay an insured sum of money when the insured succumbs. Such a premium is decided upon after taking various medical, work and other factors of the insured into account. Prevalent morbidity and mortality factors in a society are also part
