This is according to Lion of Africa Insurance chief executive, Adam Samie.
“For clients that don’t enjoy a good loss history, unfortunately they will feel the sting of market changes,” he told CNBC Africa.
Samie also explained that these market changes will include South Africa’s low economic growth, which has negatively impacted the short term insurance industry.
“The constraints that we have in the labour market, the dislocation of social unrest and service delivery issues – all these things impact quite negatively on the short term insurance industry,” he added.
Global markets, such as the export industry as well as traditional markets, are also struggling economically, largely due to the changes in weather patterns which have led to widespread flooding in countries like South Africa, Mozambique and Malawi.
However, South Africa’s low inflation environment and foreign capital inflows mean that clients who manage their risk well can expect to pay low premiums.
“Good clients can expect to receive good ratings, enjoy low premiums and wonderful service [from the insurance industry],” Samie said.
He also stated that insurance companies will be constantly competing for better clients.
“We are all competing for better clients because they manage their risk better – it means fewer claims and lower admin costs – so we can price that back into those products for those clients.”