South African insurer OUTsurance says that its car accident claims are falling as people are cutting down on driving given the depressed economy, and because of improved vehicle safety technology and ride-sharing apps (like Uber).
Lower claims meant lower premium hikes, which have remained well below inflation in recent years. This has contributed to a decline in OUTsurance’s normalised profit in the past year, reported Fin24.
“Changes in vehicle technology and driving behaviour illustrate the importance of diversifying the insurance portfolio to achieve larger shares of the commercial and life insurance markets, as well as enter other non-motor classes of insurance,” Rand Merchant Investment said in its financial statement for the year to end-June. RMI owns almost 90% of OUTsurance.
Accordingly, the insurer is investing heavily in its business-focused insurance unit, OUTsurance Business. Its team of agents have doubled over the past year.
Over the past year, OUTsurance has also entered the funeral insurance market, which is the largest life insurance market segment in South Africa.