Insurance in South Africa: Market and IT Overview
| London, United Kingdom December 29, 2005
The South African Insurance market reported $27 billion in net written premium in 2004 and is set to grow about 5% in the next five years. Celent estimates that IT spending will reach $1.78 billion by 2008.
In a new report, Insurance in South Africa: Market and Overview, Celent highlights the unique social and political challenges facing South Africa and outlines the related IT opportunities.
Since the introduction of democracy in 1994, South Africa has undergone massive political, social and economic change. South Africa痴 economy is growing and is attracting more foreign investment. A beacon of this growing interest came in May 2005, when UK-based Barclays Bank agreed to buy a majority stake in Absa, South Africa痴 largest retail bank.
The changes underway in South Africa are impacting the insurance market as well. "Local developments such as the Financial Services Charter, increased regulation, black economic empowerment, and changing distribution channels will influence and help create the next generation of insurer," says Catherine Schmitt, senior analyst at Celent and author of the report.
Celent outlines the challenges facing insurers and their impact on IT strategy arising from the new economic and political environment in South Africa. In the past, low levels of investment in IT were linked to poor company performance, but this is about to change. Insurers are gearing up to increase IT spending over the next three years. Celent estimates that US$1.5 billion will be spent on IT in 2006. Insurers will invest in integration and core system replacement and are increasingly moving away from bespoke development to buying off-the-shelf applications.
The 29-page report contains 6 figures and 10 tables.
of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact firstname.lastname@example.org for more information.