KPMG’s South African Insurance Industry Survey 2026 reports non-life profit after tax up 33% to R23.7bn, life assets above R5 trillion and capital well above the regulatory minimum. It is a survey of insurer results, not of customers, so it says little about whether policyholders are keeping their cover. We tested it against ASISA, Santam and DataEQ consumer data, and the second story is less comfortable.
KPMG draws on public company results, audited statements and regulator data. Where a claim comes from another source, we say which. Calculations and interpretations are marked as FVP views.
01The industry result is the strong signal
KPMG covers 29 non-life insurers (about 89% of industry non-life revenue), four reinsurers and the largest life groups. The life solvency ratio is 1.89x, nearly double the regulatory minimum, and the median non-life SCR ratio is 180%. Reinsurance return on equity rose to 24%, although reinsurance revenue fell 9%.
Part of the strength is cyclical. KPMG warns the benign claims environment is unlikely to last. Western Cape storms in May 2026 caused estimated economic losses of R9.1bn, and Santam reported R1.5bn of catastrophe and large losses for January to June 2026, against R144m a year earlier. Life profit, by contrast, was down 2% to R39bn.
02Cover is slipping at the margin
KPMG gives no lapse or persistency rates. It notes only that unemployment, at about 32.4%, and living costs constrain persistency. ASISA fills the gap: 8.7 million risk policies lapsed in 2025, up 6% from 8.2 million, against 10.8 million new policies sold.
If insurers are posting strong results, why are more policies lapsing?
FVP calculation That is 81 lapses for every 100 policies sold, up from 79 in 2024. Funeral policies made up 6.2 million of the new sales and credit life 1.9 million, so the volume is concentrated in cover that households buy at the lower end of the market. Recurring-premium savings surrenders fell to 458,848 from 585,265 in 2022, which suggests households are protecting savings or have less to surrender.
One caution. The lapse count includes early lapses on newly sold policies, so it reflects sales-channel churn as well as affordability. The ratio overstates household distress. The direction still matters, and ASISA tied high lapses to higher rates and living costs when it reported in October 2023.
03Where the pressure shows, and what to watch
Four pressures show up in the consumer data. Each is sourced; where we interpret, we say so.
Affordability
66% name cost of living as their top concern. 36% of insured people are trying to lower premiums, up from 29% in 2023. Only 1% are considering cutting insurance spending (Santam Barometer 2025).
Service friction
Debit-order collection scores −72 on net sentiment and email service −82. 67% of claims complaints concern claim status and communication (DataEQ 2025).
The protection gap
Cover at end-2024 met 39% of needed family income across 16.1 million earners (ASISA gap study 2025). The FSCA found only 19% of adults held insurance other than funeral cover, in 2021 data.
Weather risk
KPMG flags R9.1bn of Western Cape storm losses and an El Niño warning that could bring drought and wildfire losses. Whether this ends the profit run is an FVP hypothesis.
Households are optimising rather than leaving. Of those trying to cut premiums, 13% installed tracking devices, 12% combined motor and home cover and 11% drove less. Insurers are building for this: Santam CashBack (from 1 July 2026), Discovery Insure PerfectDrive with fuel rewards up to 65%, and Miway Micashback.
The balance sheet versus the policyholder
The same cycle reads differently depending on where you measure it. Insurer results and capital are strong. Customer retention, service and affordability are under strain.
Balance sheet · strong
Non-life profit +33%. Life solvency 1.89x. Assets R5.2tn. Non-life median SCR ratio 180%. Life individual claims settled 94.1%.
The policyholder · stretched
Lapses 8.7m, up 6%. 36% cutting premiums. Debit-order sentiment −72. Income cover meets 39% of need. Unemployment about 32.4%.
04What the Data Cannot Tell Us
KPMG gives no lapse, persistency or funeral-specific figures, and some of its thematic articles were truncated in the text we could read, so check figures against the report before quoting them. The lapse-to-sales ratio is our calculation and includes early lapses. No consumer data for 2026 was available: the Santam fieldwork ran January to April 2025 and the FSCA data relate to 2021. DataEQ measures public sentiment, over-represents complaints and names no brands, so it is not a satisfaction or trust score.
Strong on insurer results, thin on the policyholder. We rate the signals as follows, and what to watch next:
- Industry profits and capital: strong, though partly cyclical
- Rising lapses and premium trimming: moderate
- Service sentiment and the protection gap: moderate, with dated inputs
- 21 October: Stats SA September CPI. ASISA half-year 2026 statistics and insurer results: dates to be confirmed
The insurance cycle is strong where it is measured on a balance sheet. It is still stretched where it is measured at the policyholder.