As we entered the final quarter of 2016 and look back at the year gone by, there was one very significant event on the financial calendar that requires mention: the Medium-Term Budget Policy Statement (MTBPS). On October 26, the Minister of Finance, Pravin Gordhan, addressed the nation which waited in anticipation for solutions to the myriad economic and social challenges facing the country.
And while the Minister proclaimed that “our long walk is not yet over”, some would argue it has hardly yet begun.
Slowing global growth has affected investment and trade in many developing economies including ours. This, combined with our own political and social headwinds has resulted in South Africa’s economic growth forecast for 2016 being revised downward to just 0.5 percent, from 0.9 percent in February. The prediction is that it will rise to 1.7 percent in 2017. These are dismal figures for an emerging economy.
From an insurance perspective, while insurers may not have experienced high claim events so far in 2016, this year’s poor economic growth, overall decline in the value of the rand and increasing vehicle crime such as hijackings, have increased costs for both insurers and consumers.
Given these challenges, SAIA stands firm that we require more action and less talk. Improving consumer and investor confidence is critical to turning the ship around. If we do the right things to support investment and international confidence it will hasten local economic recovery.
I encourage all our members to take confidence from the fact that we are playing an increasingly key role in the financial services industry. We have taken a significant step up in 2016 and going forward, our voice will continue to grow in strength. Increased contact and partnerships with industry bodies and other important stakeholders, such as ASISA (Association of Savings and Investment South Africa), and National Treasury will see us extend our reach with a long-term view of becoming a part of the solutions for the challenges the industry, the financial sector and the country face.
The SAIA members are also looking at remaining relevant to consumers by using innovation and Fintech developments to improve the nature and distribution of products as well as enhance communication with clients, making insurance more relevant and accessible.
As an industry body and a key player in the financial sector, we would like to play our role in improving the levels of financial inclusion and bring many more South Africans into the insurance net.
I am positive that SAIA and its members will continue to think outside of the box and look at how we can serve a broader market.
We look forward to growth in 2017.