South Africa’s insurance industry delivered strong financial results in 2025, supported by solid capital positions, improved profitability across key segments, and favourable investment conditions, says KPMG.
However, its latest South African Insurance Industry Survey highlights a more complex outlook as climate volatility, affordability pressures, technology risks, and changing market dynamics shape the industry’s next phase.
Published for more than 25 years, the survey analyses the financial results of 29 non-life insurers, 15 life insurers, and four reinsurers operating in South Africa.
While the findings point to a sector in a position of financial strength, they also highlight the importance of sustainable growth, disciplined risk management, and the ability to adapt as operating conditions change.
The survey’s theme – Presence with purpose – reflects the broader challenge facing the industry: translating financial strength, technical expertise, and innovation into protecting livelihoods, building resilience, and creating meaningful value. Additional questions also emerge: what are we trying to achieve, what risks are we creating along the way, and where does human judgement and accountability need to remain present?
“The results demonstrate the financial strength of South Africa’s insurance industry, but they also highlight the importance of looking beyond headline performance,” says Derek Vice, head of Insurance at KPMG Southern Africa. “Growth needs to be sustainable, capital must be deployed carefully, and insurers need to understand how emerging risks – from climate volatility to technology and changing customer expectations – could affect their businesses over time. The challenge is to translate today’s financial resilience into the capacity to navigate tomorrow’s uncertainty.”
Life insurance results
South Africa’s life insurance market recorded resilient asset growth and steady claims payouts through 2025 and into 2026, supported by higher interest rates and strong equity markets despite broader macroeconomic headwinds.
Key findings include growth in assets under management and total in-force risk and savings policies, while capital reserves remained well above regulatory minimums. Earnings, embedded value and distributions also improved across most insurers.
However, the quality of growth remains an important consideration.
Strong demand has not always translated into higher value-of-new-business (VNB) margins or cash generation, highlighting the importance of balancing business expansion with profitability and sustainable returns.
Capital allocation strategies varied across the market, with insurers pursuing acquisitions, debt repayment, dividend distributions, share buybacks, and continued investment in organic growth. International expansion remains a strategic priority with India, broader African markets, and the US healthcare sector identified as key growth prospects.
These opportunities also introduce execution and control risks, particularly around technology, integration, assumptions, data, weather patterns, and market volatility.
“The life insurance sector’s strong capital position provides a foundation for growth, but the sustainability of that growth matters as much as its scale,” says Vice. “Insurers need to balance expansion and capital allocation with the quality of new business, cash generation, and their ability to manage emerging risks.”
Non-life insurance results
South Africa’s non-life insurance industry reported strong financial results in 2025 with higher insurance revenue, improved profitability, and robust capital positions.
Insurance revenue increased by 8,5%, from R160,3-billion in 2024 to R173,9-billion in 2025. Profit after tax rose from R17,8-billion to R23,7-billion over the same period.
The sector maintained strong capital buffers supported by earnings retention, prudent capital management, and effective reinsurance arrangements.
A relatively benign claims environment contributed to the positive results with fewer catastrophe events and favourable motor and weather-related claims experience in 2025. However, flooding in parts of South Africa – along with wildfires and severe storms in the Western Cape during the first half of 2026 – has since highlighted the potential for claims conditions to change.
Investment income also remained a significant contributor to financial performance as elevated interest rates supported stronger investment returns across the sector.
While the results demonstrate the industry’s financial resilience, the extent to which this performance can be sustained will depend on how insurers respond to a changing risk environment. Climate volatility, cyberthreats, and economic uncertainty continue to influence underwriting, pricing, and capital decisions.
At the same time, affordability has become an increasingly important consideration as households contend with cost-of-living pressures. Customers are looking for insurance products that better reflect their circumstances, offer flexibility and reward positive behaviour.
In response, insurers are exploring behaviour-linked pricing models, cashback rewards, telematics-based solutions, and digital engagement platforms to improve customer experience and retention.
These developments point to a broader strategic consideration for the industry: how to balance risk-based pricing and commercial sustainability with customers’ ability to maintain appropriate insurance cover.
“Strong financial results are important, but they need to be considered alongside the conditions that helped produce them,” says Vice. “A favourable claims year can support profitability, but it does not remove exposure to future losses. Insurers need to continually assess emerging risks, maintain underwriting discipline, and ensure that their products remain relevant and accessible as customer needs evolve.”
Reinsurance market results
South Africa’s reinsurance sector delivered strong financial results in 2025 supported by strategic underwriting actions, a relatively benign natural catastrophe and weather-related claims environment, and favourable investment market performance.
However, the sector operated within a softer pricing cycle, with aggregate insurance revenue declining by 9% across the four participating reinsurers. Two reported year-on-year revenue growth, while the other two recorded declines. Where growth was achieved, it was generally driven by expansion into new markets or gains in market share.
Despite the decline in aggregate revenue, the reinsurers surveyed demonstrated continued balance sheet resilience. Return on equity improved from 22% in 2024 to 24% in 2025, reflecting strong capital positions and underwriting discipline maintained through the cycle.
The results also continued an upward trend across many performance indicators over the past two years, although outcomes varied according to the market dynamics and operating conditions affecting individual businesses.
The findings highlight the importance of considering profitability, revenue growth, and underwriting conditions together when assessing the sector’s performance.
A softer rate environment can create opportunities for market expansion, but reinsurers must continue to balance growth ambitions with disciplined risk selection and the capacity to absorb future losses.
As a critical source of risk transfer and capacity for primary insurers, the reinsurance sector also plays an important role in supporting the wider insurance market’s ability to respond to significant losses and changing risk conditions.
Building resilience beyond strong financial results
The survey highlights an insurance industry entering its next phase from a position of financial strength, but facing a risk environment that demands continued discipline and adaptation.
For life insurers, the focus includes the quality and sustainability of growth, capital allocation, and the management of execution risks. For non-life insurers, changing claims conditions, climate exposure, and affordability will remain important considerations. Reinsurers must navigate pricing cycles while maintaining the capacity and discipline needed to support the broader market.
Across all three segments, technology and data present opportunities to improve decision-making, operational efficiency, and customer experience while also creating risks that require appropriate governance, oversight, and accountability.
“The results provide a strong foundation, but resilience cannot be taken for granted,” says Vice. “Maintaining this resilience requires insurers to remain present in the decisions they make – and clear about the purpose those decisions are intended to serve.
“Insurers will need to remain disciplined in their underwriting and capital decisions while continually reassessing the risks they face and the value they deliver to customers,” he adds. “The ability to adapt as conditions change will be central to sustaining performance over the longer term.”