SA life insurers end H1 2025 with R4.8 trillion in assets under management

South Africa’s life insurance industry has concluded the first half of 2025 in a robust financial position, with total assets under management reaching R4.8 trillion. This marks a notable increase from R4.5 trillion recorded at the end of December 2024, according to half-year statistics released by the Association for Savings and Investment South Africa (Asisa).

The industry also reported a healthy solvency buffer, with a solvency capital requirement (SCR) ratio of 1.89, nearly double the minimum threshold set by the Prudential Authority of the South African Reserve Bank. The SCR is designed to ensure that insurers can meet their obligations to policyholders, even under adverse conditions.

Gareth Friedlander, a member of the Asisa Life and Risk Board Committee, said the strength of the solvency buffer is a key indicator of the industry’s resilience.

“The key indicator of the industry’s health is the average solvency buffer, which has consistently been around double the Prudential Authority’s requirement. Strong capital buffers ensure that life insurers are in a position to pay claims and policy benefits, even during difficult times, which is when policyholders and beneficiaries also need financial support the most.”

Asisa members managed 45.6 million individual risk and savings policies by the end of June 2025, up from 44.4 million at the end of 2024. In addition, the industry oversaw approximately 85,000 group schemes on behalf of employers and other organisations.

Claims and benefits paid

According to the stats, Life insurers paid out R297 billion in claims and benefits during the first half of 2025. These payments included life, disability, critical illness, and income protection claims, as well as pension fund benefits, annuity payments, and endowment policy payouts.

Friedlander noted that these payments often follow life-altering events such as death, disability, or serious illness, or mark significant transitions like retirement.

“Our industry exists predominantly to provide people with the option to insure against the financial impact of a life-changing event or to provide for a time when they are no longer able to earn an income. Last year, ASISA members settled 95.6% of death claims received, paying beneficiaries of life and funeral policies R39.5 billion in benefits.”

Risk policies and lapses

By mid-2025, South African life insurers held 36.8 million risk policies. Of these, nearly 17 million were funeral policies, just over 7 million were credit life policies, and 12.8 million covered life, disability, severe illness, and income protection.

The industry saw a modest 1.6% growth in recurring premium risk policies during the first half of the year. However, approximately 4.5 million policies lapsed over the same period. A lapse occurs when a policyholder stops paying premiums on a risk policy that has no accumulated fund value.

Friedlander cautioned that lapses often reflect financial strain and can leave consumers vulnerable.

“While some of the policy lapses may reflect policyholders switching to alternative providers, many occur when financially stretched consumers stop paying premiums altogether. Those who lapse their policies may no longer qualify for new cover on the same terms or could experience a life-changing event while uninsured, leaving their families financially exposed.”

Savings policies under pressure

The number of individual recurring premium savings policies, such as endowments and retirement annuities, declined from 5 million at the end of 2024 to 4.9 million by June 2025. This drop was attributed to policy maturities and surrenders.

More than 233,000 savings policies were surrendered in the first half of the year. A surrender occurs when a policyholder stops paying premiums and withdraws the fund value before the policy reaches maturity.

Friedlander said economic hardship is often the driving force behind these decisions.

“Consumers are more likely to surrender their savings policies during tough times to cope with financial hardship.”

Despite the challenges, the industry’s strong capital position and consistent claims settlement rates suggest that life insurers remain well-equipped to support policyholders through uncertain times.

PERSONAL FINANCE