South Africa:Reinsurers reap the rewards of strategic actions

The 2024 results of reinsurance companies in South Africa reflect a positive trajectory with improved ratios observed for most performance indicators, according to global professional services firm KPMG in its "2025 KPMG South Africa Insurance Survey" report.

The strategic initiatives implemented by reinsurers over the last few years to moderate risk exposures, such as premium rate increases and underwriting limitations, together with a benign catastrophe claims environment during 2024, contributed meaningfully to the bottom line, said the report.

The 2025 KPMG South Africa Insurance Survey covered the financial results of four reinsurers.

Insurance revenue increased by 7% on average across all participating reinsurers, with growth rates ranging between 3% and 12% for individual reinsurers.

This result reflects a sweeping turnaround compared to 2023, when insurance revenue declined by 2%. The insurance service result also reflected positive performance with an 89% increase from 2023. Reinsurers are now moving into a cycle of softening reinsurance rates, with pricing power shifting in favour of primary insurers.

This follows a lengthy period of hardened reinsurance rates and the implementation of stringent and conservative underwriting disciplines by the reinsurance market.

The capital buffers accumulated during this period are expected to help absorb the rising cost of claims driven by catastrophe events and inflationary and geopolitical pressures, as well as pressures on underwriting margins due to competition and other unexpected market shocks.

The share of the reinsurance market by insurance revenue based on reinsurers that participated in this year’s survey, as reported in their audited financial statements, is:

The theme for this year’s survey is “Up in the air”, reflecting the multitude of priorities and external and internal forces that (re)insurers have to juggle.