News Africa22 May 2023

South Africa:Life insurers turn in creditable performance in 2022

| 22 May 2023

The industry published decent results in 2022 and were mostly aligned to expectations, despite the macro economic operating environment for South Africa as a whole, according to the international professional services firm, PwC.

PwC, in its report titled “Trust and leadership through transition - Reflections on major life insurers’ results for 31 December 2022”, says that the life insurance industry in South Africa, since the beginning of the COVID-19 pandemic, has experienced volatile economic markets, pressure on maintenance of existing business and sales of new business, and poor demographic experience driven primarily by mortality.

The report is based on an analysis of the following insurance groups:

  • Discovery
  • Liberty Holdings
  • Momentum Metropolitan Holdings
  • Old Mutual
  • Sanlam.

2022 marked the first year after the pandemic. The combined VNB margin decreased by 5% to 1.81%, PVNBP by 2% and VNB by almost 3% at an aggregated level.

PwC’s analysis of VNB highlighted a few key themes:

• The segment-specific experience seemed to be more of a mixed bag, with products sold in low-income segments and corporate business faring better on the whole, than the more affluent segments.

• Where VNBs improved, expense efficiencies were noted which seems to be a common theme from the prior period.

• Lapses seem to remain an area to watch. Although all insurers have released the mass lapse provisions held during the period of COVID-19, many have strengthened persistency assumptions to address existing or expected persistency issues.

• VNBs were likely also impacted by the strengthening of the base mortality assumptions due to the allowance for endemic impacts of COVID-19.


IFRS 17, the new accounting standard for insurance contracts, became effective for reporting periods starting on or after 1 January 2023.

The major life insurers all published some information about the impact of IFRS 17 as part of their most recent sets of results. This included estimates of the high-level directional impact on equity at the transition date.

Liberty, Old Mutual and Sanlam, who reported full-year results as of 31 December 2022, also disclosed additional details on IFRS 17 accounting policies and methodology decisions in their annual financial statements. For MMH and Discovery, further detail can be expected once they report their full-year results as of 30 June.

According to PWC’s analysis, the directional impact on the equity of the five major insurers is:




Old Mutual








Looking ahead

Many insurers’ efforts around finance transformation have focused on the immediate priority of IFRS 17 compliance. While the industry must embed IFRS 17 in the next 18 months, it’s time for insurers to think about the long-term vision for the finance function and make step changes to get there, says PwC.

PwC says that the following are a few areas to watch for the coming year:

• Competitive margins on corporate business

• Persistency experience in the mass segment

• Management actions and focus on distribution channels for the retail affluent product segment.


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