Life Insurance Confidence Index drops again
Ernst and Young's quarterly index is sitting at a 6 year low
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In its 23rd quarterly survey, the Bureau for Economic Research in
Stellenbosch revealed the results of its life insurance confidence index
commissioned by Ernst and Young.
It was shown that public confidence in the life insurance sector fell once
more in the first quarter of the year.
The results are believed to be due to weak investment income and shrinking
profits.
The Bureau traditionally examines the performance of a wide number of
financial services sectors in the South Africa on a regular, quarterly basis.
These sectors include life assurance, banking and investment management.
The results showed that life insurance confidence was adjusted from 48 to 46.
In comparison, banking confidence was set at 37 points and investment managers
at 43 points.
"Despite the relatively sound business fundamentals, confidence once again
hit its lowest point yet in the six year history of the life cycle," said Tim
Rutherford, Ernst and Young's insurance industry spokesman. "We ascribe this to
the declining financial services outlook, both globally and locally."
Nevertheless, Rutherford said the results were steady, bearing in mind
external factors that influenced the life insurance sector. "On average, this
means that just less than half of all life insurers are trading satisfactorily,
which is quite a steady result, given the turmoil in global financial services
markets, and weak local economic factors."
The results were also in line with sentiments reflected for other financial
services sectors in South Africa.
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