(Repeat for additional subscribers)
Feb 4 (The following statement was released by the rating agency)
Fitch Ratings says in a new report that South African non-life insurers' 2013 underwriting
profits will be negatively affected by significant claims related to natural catastrophe events.
However, earnings have strongly benefited from rising equity markets, partially
offsetting the subdued underwriting performance.
Underwriting margins continue to be pressured by the high level of competition
in the South African non-life insurance market. Financial strain on consumers
and the overall difficult economic environment also make it difficult for
insurers to achieve appropriate premiums for the risks underwritten.
The solvency positions of South African non-life insurers continued to be
resilient in 2013. Most companies maintain a significant buffer over the
regulatory minimum capital requirement. As part of the new interim measures
ahead of the Solvency Assessment Management implementation, non-life insurers
will be required to change to a risk-based approach to calculating capital
requirements. It is not yet clear to what extent this will affect solvency
The special report "South African Non-Life Insurance" is available at
www.fitchratings.com or by clicking on the link below.
Link to Fitch Ratings' Report: South African Non-Life Insurance: Catastrophe
Claims and Competition Squeeze Margins