If your latest insurance renewal came with a higher premium, stricter conditions, or new exclusions, you’re not alone. The South African insurance market is currently experiencing one of its most challenging cycles in years — and it’s being felt across both personal and commercial insurance sectors.
But this isn’t just a local issue. What’s happening in South Africa is part of a much broader global shift in how risk is viewed, priced, and managed. Insurers and reinsurers are tightening their belts — and understanding why can help you take steps to protect yourself and your assets more effectively.
Climate Change and Global Losses Are Driving Up the Cost of Risk
In 2023, global insured losses from natural catastrophes totalled a staggering USD 95 billion, with floods and severe storms being the major contributors (Swiss Re Institute, 2024). Rising sea levels, widespread flooding, and longer wildfire seasons are making insurers and reinsurers more cautious — and more selective.
Although these disasters are often thousands of kilometres away, their ripple effects are felt here at home. South African insurers rely heavily on global reinsurers to help absorb large or catastrophic claims. As reinsurers face increased losses, they raise prices and reduce capacity. According to Munich Re, reinsurance rates in catastrophe-prone areas rose by up to 40% in 2023 (Munich Re, Market Update 2024).
Locally, we’ve also had our share of catastrophes. The KwaZulu-Natal floods of April 2022 alone resulted in more than R4.3 billion in insured damages (SAIA, 2022). This event, one of the most expensive weather disasters in South African history, served as a wake-up call for both insurers and clients about the growing risks of water damage — especially in coastal and low-lying regions.
The Industry Is Responding with Stricter Risk Assessment
In response to these pressures, insurers are adopting more rigorous, risk-based underwriting practices. Instead of broadly pricing risk by category (e.g., all homes or all SMEs), insurers are now looking much more closely at how well individual risks are
managed.
That means more questions, more documentation, and more emphasis on risk mitigation. Homes and businesses without preventative measures — such as monitored alarms, surge protection, fire systems, or maintenance records — may find it harder to obtain affordable insurance, or may face exclusions and cover limits.
In fact, many reinsurers are requiring their insurers to decline cover for poorly protected properties altogether, especially in high-risk zones like flood-prone coastal areas or wildfire-exposed farmland.
What This Means for You — and What You Can Do
In this challenging environment, the best thing you can do is proactively manage your risks. Insurance alone is no longer enough; demonstrating that you’ve taken steps to reduce potential losses can make a meaningful difference to your cover and premium.
Practical steps might include:
• Installing monitored alarm systems, CCTV, and backup power.
• Maintaining roofs, gutters, and drainage systems.
• Using surge protection and fire suppression systems.
• Documenting safety protocols, especially for businesses.
• Having an up-to-date asset register and maintenance log.
At Octofin, we’re helping clients navigate this environment by reviewing policies, identifying risk exposures, and preparing strong underwriting submissions. Our goal is not only to help you retain cover — but to improve your insurability in a world where insurers are becoming more selective by the day.