Loading...
News Updates:



Yuresh Maharaj | 2025: a year of continued change and opportunity for the insurance industry

Yuresh Maharaj | 2025: a year of continued change and opportunity for the insurance industry
30-01-25 / Yuresh Maharaj

Yuresh Maharaj | 2025: a year of continued change and opportunity for the insurance industry

The future of insurance in Africa lies in the convergence of human capital, technological innovation, and strategic partnerships. By leveraging these assets, we can unlock the continent's vast potential, drive financial inclusion, and create a more prosperous future for all.

2024 was a year of change and opportunity – from the optimism ushered in by the formation of South Africa's Government of National Unity (GNU) to the accelerating convergence of banking and insurance – and 2025 looks to be similarly dynamic, with the insurance sector continuing to navigate a complex landscape of regulatory shifts, rising international isolationism and geopolitical division, and technological disruption.

The introduction of the Two-Pot Retirement system in South Africa was a watershed moment for the industry. As withdrawal requests stabilise, we have seen a strong demand for information and guidance. The two-pot system has a beneficial role to play in the lives of consumers, but insurers have a responsibility to empower consumers to make informed decisions about their long-term financial prospects.

The pace of technological change will continue to accelerate in 2025, with digital transformation remaining an imperative. Legacy modernisation, straight-through processing, and cloud-based resource consumption will continue to enhance agility and customer-centricity. Artificial intelligence and data analytics enable greater personalization and proactive client engagement, augmenting human relationships, which remain imperative for this highly intermediated industry.

The successful integration of human expertise and technological prowess will be a defining factor for financial services success in the years ahead as we leverage information to help clients live better lives.

Insurance products are developed along a continuum of increasing complexity. Low-advice, straightforward solutions are increasingly delivered through digital channels, leveraging banking partnerships and mobile apps. Speed, efficiency, and user experience are the key differentiators in this segment. On the other hand, complex products require a human touch – and a capable, tech-enabled distribution force that can build trust and provide personalised advice. And so, the value of financial advice can never be over emphasised. 

To support consistent, quality service across a continent, everyone has to buy into the purpose of why the institution exists. The emotional message behind insurance: "How do we grow and protect what matters most for the clients that we serve?, should continue to resonate.

One of the most significant trends currently shaping the industry has been the accelerating convergence of insurance and other financial services. As larger banks seek to bring insurance solutions in-house, the pursuit of comprehensive financial offerings has emerged as a key competitive advantage. The insurance industry's focus, meanwhile, is shifting from transactional selling to holistic financial planning, emphasising growth, protection, and legacy building.

The impetus for banking-insurance convergence lies in the synergies and counter-cyclical benefits it offers. By integrating insurance into their portfolios, banks can provide clients with a one-stop financial services experience, enhancing customer stickiness and loyalty. Moreover, the divergent economic sensitivities of banking and insurance create a natural hedge – while lower interest rates may dampen banking income, they tend to boost insurance performance. This diversification strategy positions financial institutions to navigate economic volatility more effectively.

As South Africa assumes the G20 Presidency in 2025, the nation has a historic opportunity to shape the global financial agenda. The G20 platform will amplify Africa's voice and aspirations, fostering greater international – and continental – collaboration and investment. The growth potential in East and West Africa remains compelling. Kenya and Uganda, with their strategic location as gateways to the Middle East, are witnessing economic upliftment and rising institutional needs. Nigeria presents significant long-term prospects, given its demographic dividend.

The formation of South Africa's GNU ushered in a period of relative political consensus and laid the groundwork for the legislative and regulatory progress that is critically needed for long-term economic growth. The GNU's success in addressing critical infrastructure challenges related to water, electricity and logistics will be pivotal in driving GDP growth and investor confidence. If the GNU's proposed economic reforms take hold, the industry is poised for a period of stability and growth.

*Yuresh Maharaj is the Chief Executive Officer: Insurance & Asset Management at Standard Bank Group.

 

Leave a Comment