South Africa’s largest life insurer, Sanlam, has seen higher policy lapses by some clients in the lower-income segment as consumers grapple with the high interest rate, the inflationary environment and an economy struck with muted growth.
Low economic growth in South Africa and tight policy action due to sticky inflation have squeezed consumers’ disposable income. In the company’s mass business, which still makes up a smaller proportion relative to the affluent book, some lapses have increased by about 20% during the reporting period, Mukhuba said.
“We’re seeing a turnaround, but we’re not out of the woods yet with the longer-duration persistency,” she said. ADVERTISEMENT CONTINUE READING BELOW “We’re still seeing challenges with the longer-duration persistency, but on the six-month one , we’re seeing it recovering and improving, and that is an early indicator for us… [that] the actions that we’re putting in place as management to try [to] assist our clients during the tough times are starting to pay off,” she said.