The latest Santam Insurance Barometer Report has revealed that South African households and businesses are grappling with persistent economic pressures, yet few are willing to sacrifice their short-term insurance coverage to cut costs.
Now in its fourth edition, the biennial report highlights how high inflation and interest rates continue to squeeze consumers, with 84% of respondents admitting they’ve adjusted their spending habits to cope with the rising cost of living. However, only 1% have canceled their insurance policies to save money—a sign that short-term insurance is still viewed as essential.
Insurance Holds Firm Amid Financial Pressure
Atang Matebesi, CEO of Santam Client Solutions, noted that while consumers and businesses are slashing expenses elsewhere, insurance premiums remain largely untouched.
“One of the surprising findings was how both consumers and businesses are reacting to these challenges,” Matebesi said. “Many are implementing cost-cutting measures to stay afloat, but they’re not compromising on insurance, which shows the value they place on coverage.”
Warning Over Outdated Tracking Systems
The report also urged policyholders to check whether their vehicle tracking devices and alarm systems—many still reliant on 2G and 3G networks—remain functional as telecom providers phase out older networks.
“We encourage clients to test their devices and contact service providers to upgrade if needed,” Matebesi cautioned. “The last thing you want is a stolen car and a non-functional tracker when you need it most.”
Potholes Drive Up Insurance Claims
Another key concern is South Africa’s deteriorating infrastructure, particularly pothole-riddled roads, which are causing increasing damage to vehicles and leading to a spike in insurance claims across multiple policy types. Businesses cited crumbling roads as a major risk, with repair costs adding further strain.
Looking Ahead
Despite economic hardships, the report suggests that South Africans see insurance as a critical safeguard rather than a discretionary expense. As financial pressures persist, Santam’s findings underscore the delicate balance between cutting costs and maintaining essential protections.