Standard and Poor’s: Insurance sector risk ‘is intermediate’

Industry and country risk for the South African life insurance sector has been found to be intermediate by the Standard & Poor’s ratings service. The agency said yesterday the overall assessment was that South Africa’s risk level was at the same level as several other developing and developed life markets, including Thailand, China, Japan and Germany. “Our assessment of country risk as moderate incorporates our view of South Africa’s low economic growth, stable political institutions, modest financial system risk, and acceptable rule of law,” the agency said. On country risk, it said South Africa’s economy continued to face fundamental supply shortages such as infrastructure bottlenecks, ongoing labour relations issues and skills shortages, as well as slower growth in Europe, which continued to constrain potential growth. Popular dissatisfaction, particularly among the youth, had long-term policy ramifications for addressing imbalances and might weaken ANC’s position.” it said. – Staff Reporter