In partnership with Morningstar: 2022 has started with no shortage of talking points in financial markets. January proved to be a rather volatile month for global markets, as concerns over persistently elevated inflation prints, potentially higher interest rates and geopolitical tensions (the escalating military conflict between Russia, Ukraine and NATO being the most apparent) weighed on sentiment.
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In partnership with Morningstar: The Russian invasion of Ukraine is increasingly fluid and potentially harrowing. As investors—not as politicians or news reporters—we thought some perspective on the investing implications from a multi- asset perspective is warranted. In partnership with Morningstar: In recent weeks, markets have been tossed back and forth by speculative headlines regarding the potential for Russia to invade Ukraine. The potential invasion has become a reality with Russia launching their troops into pro-Russian regions in Ukraine. This has led to the S&P 500 falling into a correction for the first time in two years, joining the Nasdaq Composite. (A correction is defined as a drop of more than 10% but not more than 20%.) On 23 February 2022, Finance Minister Enoch Godongwana delivered the annual budget speech, providing an update on South Africa’s finances. Low economic growth, vast unemployment, increasing debt levels, coupled with South Africa still being in a state of disaster two years since the start of the Covid-19 pandemic, all contributed to a complicated juggling act for the Minister of Finance. Given the unrest witnessed in 2021 along with weak foreign investment, the 2022 budget had to be geared not only to curb unemployment and to stimulate economic growth, but to also give assurance to foreign investors. In the words of Minister Godongwana “we need to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. This budget presents this balance”. On the 3rd of August, Kevin got a text message telling him R49,432.31 has been paid into his bank account. How did that happen? And would you like to get it as well? You can watch the Youtube video by clicking in the picture above or continue to read below how!
So in the early morning of the 3rd August 2021, this text message came to my iPhone at 2:48am: Congratulations, your Discovery Life Health Integrator Payback benefit of R49,423.31 that rewards you for looking after your health with Vitality has been released successfully.Later that day, at 9:51am, this text message came to my iPhone: Payment for your Discovery Life policy Health Integrator PayBack for R49,432.31 has been made. It will show in your account in the next four working days. Then I checked my FNB bank account, and indeed I have received this money into my bank account! I was ecstatic. This is a lovely bonus to receive. So why Discovery Life pays me this bonus? It relates to my Discovery Life policy. I took up my Discovery Life policy with my then broker Jose Afonso, in 2003. And I have been paying for it since. How a Discovery Life policy works is, if you are a Discovery Health member, and a Vitality member, you can get your Discovery Life policy Health integrated, to get a discounted premium, as well as Health Integrator PayBacks. With my policy, I receive such paybacks every five years. It is based on my Health claims, or medical aid claims, as well as my Vitality status every year. The lower the medical aid claims, and the higher the Vitality status, the higher the percentage of life insurance premiums is paid back to me. Discovery Life calculates the percentage of payback based on medical aid claims and Vitality status every year, then aggregate over five years, to pay me the payback every five years. Since I have been good at keeping medical aid claims low and maintaining Vitality diamond status, the highest Vitality status you can achieve on Vitality, I get up to 50% of my life insurance premiums back. So essentially I only pay half price for my life insurance benefits. Sounds good? So what do you need to do in order to get 50% of your life insurance premiums back in bonuses?
Number 4, stay healthy, engage with Vitality and improve your health. You should work to reach Vitality diamond status and stay a diamond member. If you do step 4 consistently, as part of your lifestyle, then you will reap the best rewards from the Discovery ecosystem and a Discovery Life policy. It is important that you understand how Vitality works, how to get Vitality points, so you can get to the highest diamond level as soon as possible. Vitality rules change all the time, at least annually, so it is important to know the changes and play the game to get your points. Vitality does make it harder and harder every year for you to get points, only recently I found to my dismay that 5,000 steps a day can only accumulate 1,000 points a year, not great as I and my wife need to get 100,000 points this year to maintain our diamond status! If you take out a new DIscovery Life policy, you can choose to have Annual PayBack, whereby you get an amount paid back to you annually, then an additional amount every five years. You can also select the Double PayBack option, where you choose to receive your PayBacks five years later and double your payback amount. So if you have or aspire to have a healthy lifestyle, eat healthy, exercise regularly, keep fit, like technology and gadgets, and like a challenge, Vitality is for you, Discovery Life is for you, and you are well on your way to get the best rewards and paybacks. So who is Discovery Life not for? If you do not like to live healthily, you do not watch what you eat, you don't exercise, you don't like to keep up with technology and gadgets, you don't like the idea of working hard to get something back, keeping up with all the changes of the Vitality programme, or you have many medical aid claims, then Discovery Life is probably not suitable for you. If you have any questions or would like to review your life cover, email [email protected] or WhatsApp 0762005488, and we will contact you. South African Market Update South African equities ended the month in positive territory, outperforming other developed and emerging markets on the back of strong performance from financials and commodity counters. Local bonds also had a positive month despite December’s inflation coming in higher than expected. Their performance was supported by the relatively attractive yields on offer, which remain above the middle of the inflation target. Local listed Property had a volatile month and ended January in negative territory. The large index constituents had negative performance as the hawkish rhetoric from global central banks affected market sentiment. The rand had positive performance against major developed market currencies over the month, strengthening against the US dollar, the euro and the pound sterling. South African Economic Update SA headline CPI increased to 5.9% year-on-year for December (from 5.5% in November). The largest contributor to the increase in headline CPI was transport, driven by rising petrol and diesel prices. Higher prices in food and non-alcoholic categories also contributed to the increase in inflation. The South African Reserve Bank (SARB) increased the repo rate by 25bp to 4% in January and revised its inflation forecast for 2022 from 4.3% to 4.9%. The SARB also revised its economic growth forecast for 2021 from 5.2% to 4.8% to account for the contraction during the third quarter of 2021 caused by the Omicron Covid-19 variant-led disruptions. SA’s trade surplus narrowed in December to R30.14 billion, from a surplus in November of R35.8 billion. ![]() The effects of the COVID-19 pandemic have changed the lives of everyone globally. Over the last couple of months, the world has endured much suffering and is now starting to adjust to this "new normal". Covid 19 has brought increases to many sectors, and this includes the insurance and motor sector. In the next few months, we may see the after math of lockdown, premium holidays, halting in operations and delayed shipments. One of the ongoing effects that insurers have endured over this time is the impact on the supply of vehicles, vehicle parts and paint globally. Paint prices alone have increased by 9% since last year. At the same time, the world is experiencing a severe shortage of semiconductors and microchips used in the production of vehicles. Furthermore, constraints in shipping and global transportation have resulted in an escalation in the cost and time to procure replacement parts. To highlight the severity of this effect, global shipping costs have increased by 170% during 2021 according to the Drewry World Container Index. As an insurer that is reliant on these factors, insurers have experienced this impact first-hand, resulting in a sharp escalation in both vehicle repair costs and the cost of total losses such as write-offs and thefts. Insurers have seen that vehicle repair costs have far outpaced inflation and are up to 9% higher in the last six months alone (resulting in an annualised rate of 18% per annum). The rate of vehicle depreciation from year to year is also lower than historically experienced due to the growing demand for second-hand cars. This is a global phenomenon and has affected vehicle traders and insurers around the world. To keep premiums truly in line with risks, some insurers are looking at special additional increases for clients who have high loss ratios exceeding 80% (over 3 years). The reason that this is being done is to try manage and keep claims and premium contributions fair between all clients under the insurer. At the same time as vehicle claims have been increasing, Insurers have also seen an unexpected rise in the frequency and value of home insurance claims from building costs to electronic replacement items. As an example, in 2021 Discovery Insure experienced 37% more hours of loadshedding than in 2020, resulting in a 23% increase in power surge claims. These global circumstances are unprecedented and far beyond what may be considered normal or allowed for in standard insurance pricing. Contact us to get a comparative and we might get you a cheaper premium than your current insurer, contact Marizka tel (011)658-1333 email: [email protected] |
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January 2025
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