Transcription
Fourth ASISA Insurance Gap Study(performed by True South Actuaries & Consultants)www.truesouth.co.zaOctober 2016
AgendaMethodologyR28.8 trillionResponsesSegmentswww.truesouth.co.zaR28.8 trillion(A trillion has 12 zeros)Context
ContextAgendaMethodologyR28.8 trillionResponsesSegmentsMethodologyR28.8 trillionResponsesSegmentswww.truesouth.co.zaR28.8 trillion(A trillion has 12 zeros)Context
ContextContext within the SA population landscapeMethodologyR28.8 trillionResponsesSegmentswww.truesouth.co.za55 million people,but how manyearners?55 million people inSouth Africa
ContextContext within the SA population landscapeMethodologyR28.8 trillionResponsesSegmentswww.truesouth.co.za 18’s: 36% 65’s: 5%55 millionpeople in32 millionSouth18Africaagedto 65
ContextContext within the SA population landscapeMethodologyR28.8 s representaround ¼ of SApopulation14 millionearners
ContextContext within the SA population landscapeMethodologyR28.8 trillionResponsesSegmentsPoorestRichest2.6m2.8m14 millionNextNextNext2.8m earners 2.8m2.6m2.6mNext2.8mwww.truesouth.co.zaDiversity in SA:difficult to grasp“Average Earner”RichestPoorest2.6m2.8m
ContextMethodologyMethodologyR28.8 er20% (R2.8m)richest SA earnersPoorestRichest2.6m2.8m
ContextMethodology: Insurance NeedMethodologyR28.8 trillionHow much insurance is needed?ResponsesSegments1 200 0001 000 000PoorestRichest2.6m2.8m800 000600 000400 000200 000www.truesouth.co.za2036 (62)2034 (60)2032 (58)2030 (56)2028 (54)2026 (52)2024 (50)2022 (48)2020 (46)2018 (44)2016 (42)-Average expectedearnings profile1 400 000
ContextMethodology: Insurance NeedMethodologyR28.8 trillionHow much insurance is needed?Segments1 400 000R0.5m20% Richest SAearners earnR500K p.a.Need for insuranceEarningsResponses1 200 0001 000 000800 000600 000400 000200 000www.truesouth.co.za2036 (62)2034 (60)2032 (58)2030 (56)2028 (54)2026 (52)2024 (50)2022 (48)2020 (46)2018 (44)2016 (42)-
ContextMethodology: Insurance NeedMethodologyR28.8 trillionHow much insurance is needed?R0.5m64%1 200 0001 000 000800 000600 000400 000200 000www.truesouth.co.za2033 (62)2031 (60)2029 (58)2027 (56)2025 (54)2023 (52)2021 (50)2019 (48)2017 (46)2015 (44)2013 (42)-On average 64% ofearnings at riskReplacement requirementSegments1 400 000Need for insuranceEarningsResponses
ContextMethodology: Insurance NeedMethodologyR28.8 trillionHow much insurance is needed?SegmentsR0.5mReplacement requirement64%Capitalisation factor14.11 200 0001 000 000800 000600 000400 000200 000www.truesouth.co.za2036 (62)2034 (60)2032 (58)2030 (56)2028 (54)2026 (52)2024 (50)2022 (48)2020 (46)2018 (44)2016 (42)-All future years needto be provided for1 400 000Need for insuranceEarningsResponses
ContextMethodology: Insurance NeedMethodologyR28.8 trillionHow much insurance is needed?64%Capitalisation factor14.1R4.5m1 200 0001 000 000800 000600 000400 000200 000www.truesouth.co.za2036 (62)2034 (60)2032 (58)2030 (56)2028 (54)2026 (52)2024 (50)2022 (48)2020 (46)2018 (44)2016 (42)-At the “high end”,ave need forinsurance: R4.5m R0.5mReplacement requirementInsurance needSegments1 400 000Need for insuranceEarningsResponses
ContextMethodology: Actual CoverMethodologyR28.8 trillionTotal insurance coverResponsesSegmentsEarningsActual insuranceR0.5mRetailR1.3mReplacement requirement64%Group LifeR0.8mCapitalisation factor14.1Government grantsR0.0mTotalR2.1mInsurance needwww.truesouth.co.zaR4.5m but average actualinsurance over isonly R2.1mNeed for insurance
ContextMethodology: Insurance GapMethodologyR28.8 trillionInsurance Gap Insurance Need – Actual CoverEarningsSegmentsActual insuranceR0.5mRetailR1.3mReplacement requirement64%Group LifeR0.8mCapitalisation factor14.1Government grantsR0.0mTotalR2.1mInsurance needwww.truesouth.co.zaR4.5m but average actualinsurance over isonly R2.1mNeed for insuranceResponses
ContextMethodology: Insurance GapMethodologyR28.8 trillionInsurance Gap Insurance Need – Actual CoverActual insuranceR0.5mRetailR1.3mReplacement requirement64%Group LifeR0.8mCapitalisation factor14.1Government grantsR0.0mTotalR2.1mInsurance needR4.5mR4.5m – R2.1m R2.4mAverage Death insurance gap for richest 20% of SA earning populationwww.truesouth.co.zaAverage gap:R2.4m per earnerEarningsSegments(Those earning R500k)Need for insuranceResponses
ContextMethodologyR28.8 trillion (R12.9tn death gap)R28.8 trillionResponsesSegmentsAverageGapPoorest 20%Next 20%Next 20%Next 20%Richest opleTotalGAPAverage gap:R2.4m per earnerAverageActual(Those earning R500k)AverageNeed
ContextMethodologyR28.8 trillion (R12.9tn death gap)R28.8 mberpeopleTotalGAPPoorest 20%Next 20%Next 20%Next 20%Richest tnR1 trillion:Stack of R100 notes from CapeTown to BloemfonteinAverageNeed
ContextMethodologyR28.8 trillion (R12.9tn death gap)R28.8 mberpeopleTotalGAPAdequacyof coverPoorest 20%R0.1mR0.0mR0.1m2.8mR0.2tn4%Next 20%R0.3mR0.0mR0.3m2.8mR0.9tn7%Next 20%R0.8mR0.1mR0.7m2.8mR1.8tn16%Next 20%R1.6mR0.4mR1.2m2.8mR3.3tn25%Richest esouth.co.za37%R1 trillion:Stack of R100 notes from CapeTown to BloemfonteinAverageNeed
ContextMethodologyR28.8 trillion (R16.0tn disability gap)R28.8 mberpeopleTotalGAPAdequacyof coverPoorest 20%R0.2mR0.4m-R0.2m2.8m-R0.5tn-Next 20%R0.6mR0.4mR0.2m2.8mR0.6tn64%Next 20%R1.2mR0.5mR0.8m2.8mR2.1tn37%Next 20%R2.3mR0.7mR1.6m2.8mR4.5tn30%Richest esouth.co.za45%R1 trillion:Stack of R100 notes from CapeTown to BloemfonteinAverageNeed
ContextR28.8 trillion(R12.9tn death gap R16.0tn disability gap)MethodologyR28.8 t4.5tn2.6m2.1tn16.0tnDeath Gap: R12.9tnDisability : R16.0tnTotal: R28.8tnDeath
ContextMethodologyResponsesR28.8 lityBuy insurance(% earnings)4.2%2.4%Cut expenses(% reduction)34%30%Seek Employment(extra income)R4 970R5 977“There are worse things inlife than death. Have youever spent an evening withan insurance salesman?" –(Woody Allen)Death
ContextMethodologySegmentsR28.8 t4.5tn2.6m2.1tn16.0tnDeath Gap: R12.9tnDisability : R16.0tnTotal: R28.8tnDeath
ContextMethodologySegments (Middle group only)R28.8 6m2.1tn16.0tnDeath Gap: R1.8tnDisability : R2.1tnTotal: R3.9tnDeath
ContextDeath Gap: Effect of AgeMethodologyR28.8 trillionMiddle income group 0.2mR0.2mR0.0tn39%55 R2.8mR1.8tn16%Adequacyof coverAdequacy of life coverincreases in line with age(possibly due to lump sum natureof group risk cover)AverageNeed
ContextDisability Gap: Effect of AgeMethodologyR28.8 trillionMiddle income group R0.2mR0.2mR0.0tn57%55 2.8mR2.1tn37%Adequacyof coverAdequacy of disability coverincreases in line with age(possibly due to lump sum natureof group risk cover)AverageNeed
ContextDeath Gap: Effect of EducationMethodologyR28.8 trillionMiddle income group rpeopleTotalGAPPS or lowerR0.5mR0.1mR0.4mR0.4mR0.2tn14%Some 1mR0.7mR2.8mR1.8tn16%Adequacyof coverCover adequacy is much higherfor the group with a degree asthe highest education levelAverageNeed
ContextDisability Gap: Effect of EducationMethodologyR28.8 trillionMiddle income group rpeopleTotalGAPPS or lowerR0.8mR0.3mR0.5mR0.4mR0.2tn36%Some 5mR0.7mR2.8mR2.1tn37%Adequacyof coverCover adequacy is much higherfor the group with a degree asthe highest education levelAverageNeed
ContextDeath Gap: Effect of GeographyMethodologyR28.8 trillionMiddle income group %Western mR0.1mR0.7mR0.5mR0.3tn12%Eastern CapeR0.8mR0.1mR0.6mR0.2mR0.1tn15%North WestR0.5mR0.1mR0.4mR0.2mR0.1tn13%Free R0.1tn8%Northern .7mR2.8mR1.8tn16%Adequacyof coverDeath cover adequacy for themiddle income group is highestin Gauteng and Western CapeAverageNeed
ContextDeath Gap: Effect of GenderMethodologyR28.8 trillionMiddle income group .7mR2.8mR1.8tn16%Adequacyof coverCover adequacy is fairly similarfor male and female earnersAverageNeed
ContextDisability Gap: Effect of GenderMethodologyR28.8 trillionMiddle income group .7mR2.8mR2.1tn37%Adequacyof coverCover adequacy is fairly similarfor male and female earnersAverageNeed
ContextQuestionsMethodologyR28.8 trillionResponsesSegments“Provision for others is afundamental responsibility of human life.”(Woodrow T. Wilson – 28th American President)www.truesouth.co.za
Insurance Gap Insurance Need - Actual Cover gap: per earner 0k) www.truesouth.co.za Need for insurance Earnings RetailR0.5m Replacement requirement 64% Capitalisation factor 14.1 Insurance need TotalR4.5m Actual insurance R1.3m Group Life R0.8m Government grants R0.0m R2.1m R4.5m -R2.1m R2.4m Average Death insurance gap for richest 20% .
