Why isn’t there more micro insurance in South Africa

After a recent Actuarial Society sessional presentation I gave on micro insurance and the regulatory developments, I was asked why there aren’t more micro insurers operating in South Africa. Here is a slightly paraphrased version of the full question: The larger insurance players seem reluctant to enter the market. Why do you think this market […]

Coffee as the thin edge

Pick n Pay is starting to gain some useful insights into customer behaviour and purchasing decisions at different stores. They’re using coffee as a key product to better understand who buys what, where and when. ¬†They’re tossing out (more likely de-emphaszing) LSMs as a method of categorising customers and moving to more sophisticated measures (including […]

Medical Schemes, discrimination and the CPA

The Consumer Protection Act (CPA) protects consumers from abuse by enforcing fair practices, improved disclosure and added minimum warranties etc, It’s a good piece of legislation, even if at times some aspects of it may result in greater costs than benefits. TimesLive has a story about the alleged noncompliance of medical schemes with the CPA. […]

Gaining new insight into insurer profitability through New Business Margin on Revenue

The Value of New Business written by an insurers is a good measure of the value created through sales activity over a certain period. It’s not the easiest number to interpret in terms of profitability though. New Business Margin, which is the Value of New Business (VNB) as a percentage of the Present Value of […]

New thoughts on renewal rates for Embedded Values

Embedded Values (EVs) are widely used to measure value for life insurers. In the context of long-term contracts such as individual life, it reflects the value embedded in prudent regulatory provisions (or “actuarial reserves”). For short-term business (group risk, health insurance, health administration, general insurance etc.) it is something different since these lines don’t have […]

Who do you trust more than your bank?

Turns out Australian banks are concerned that their customers have greater confidence and trust in Google and PayPal than in their own institutions. It wasn’t that long ago that financial institutions needed marble-clad offices and multi-decade histories to show that they were serious and were financially stable and could be trusted. Now the organisations that […]

Lower interconnect not the promised panacea

Decreasing interconnect fees was supposed to lower telecoms costs, promote competition and create world peace. It’s done none of these because the logic underlying it was flawed. Analysts focused on interconnect as an expense, happily ignoring the revenue side (since it was a fee paid to another company within the industry). Never has a telecoms […]

Too Small To Succeed

According to a Fin24 story this morning, the FSB is probing smaller unit trusts. The economics of a fund manager depends entirely on growing funds under management so that revenues (based on assets under management) grow to be larger than costs (significantly fixed and at most semi-variable). Details of performance fees and the second order […]