Happy Christmas!
The
Effect of Covid-19 on the Insurance Industry
The Covid-19 pandemic has had a huge impact on all our
lives, from our family and friends to colleagues and employees. We all know
someone who has died or has become grievously ill! The impact on the life
insurance industry has been pronounced, as depicted in the claims statistics
that insurers shared in relation to the pandemic.
The insurance industry will have paid out a staggering R25
billion in extra death claims by the end of the third wave. The claims
statistics indicate a direct link between vaccinations and a reduction in
claims and they are therefore promoting vaccinations as the right thing to do.
These claims represent a traumatic loss of life with far reaching consequences,
but the insurance companies are unequivocal that vaccinations have a positive
impact in reducing COVID related deaths.
Two life insurance companies have advised that with effect
from the 1st December 2021 they will require the official digital
vaccination certificate as an underwriting requirement when applying for life
cover. The other insurance companies will no doubt follow suit soon.
Whilst we all have the right to choose whether to be
vaccinated or not, those who choose not to be vaccinated pose a greater risk to
the insurance companies and they therefore may experience higher premiums
depending on their risk factors.
How
have the markets performed in 2021? Despite the COVID-19 pandemic, 2021 has
been a good year for investors!
The year-to-date figures as at the 26th November
2021 were:
The Johannesburg Stock Exchange All-Share Index: 20%
The MSCI AWCI Index: 27.1% [in Rand]
[The MSCI All Country World Index (ACWI) is a
stock index designed to track broad global equity-market performance.
Maintained by Morgan Stanley Capital International (MSCI), the index is
comprised of the stocks of about 3,000 companies from 23 developed countries
and 26 emerging markets.]
The South African Unit trust industry has also provided
excellent performance!
The average fund in the South African General Equity
sector achieved: 20.57% [high risk]
The average balanced fund in the Multi-Asset High Equity
sector achieved: 15.18% [medium risk]
The average fund in the Multi-Asset Low Equity sector
achieved: 9.68% [lower risk]
[Figures supplied by
Morningstar. The year-to-date figures as at the 31st October 2021
were:]
So, some cheerful new as we approach the festive season! May
you all be filled with the blessing of Christmas!
Christmas
Shutdown
Our offices will be closed for the festive season from
Thursday 16th December 2021 and will re-open on Monday 10th January
2022.
We at Kevin Mills Financial Services CC, Greg, Leonie, Kevin and Colleen wish all our clients, family and friends a Blessed Christmas and Happy New Year! Let us all pray that the New Year will bring an abundance of joy and peace.
“For unto you is born this day in the city of David, a saviour, who is Christ the Lord” Luke 2: 11
