Santam would like to thank you for your contribution to their 2015 results. Santam reported strong underwriting results with a net underwriting margin of 9,6% which was strongly influenced by the positive impact of disciplined underwriting actions and a favorable claims environment. Despite challenging industry conditions, gross written premiums increased by 8% (excluding cell captive insurance).
Underwriting results in the motor and property classes improved substantially although claims to the value of R290 million (2014: R187 million) resulting from hail in Kwazulu-Natal and Mpumalanga negatively impacted the claims ratio. The Santam board declared a final dividend of 528 cents per share, up 10% on the previous year. The road ahead Market conditions in the South African insurance industry will remain challenging. A weaker Rand and consequent increase in claims costs will put more pressure on insurers and consumers. People are often forced to cut on their expenses and short-term insurance is no exception. We know from experience, however, that quality insurance – and the advice and support of an intermediary – is now more important than ever. This is why we have renewed our focus on internal efficiency, the optimisation of our investments in technology and the improvement of operational effectiveness. It will lead to faster decision-making, a more diverse distribution model and a segmented service model for intermediaries, to name a few examples. Click here for a complete report on our financial results. Please contact Thomas or Innocentia in our Short Term Department; email [email protected] , to get a Santam quote Source: Santam
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A US insured suffered losses when the seal on a bottled beverage it was producing for another company failed quality control measures. A US court of appeals found that the losses were not covered by the “all-risks” property insurance policy because the losses were not physical loss or damage.
The insured was to produce 40 million bottles of the beverage in the first year. The bottled beverages failed the secure seal test and the bottles were not accepted. The policy covered “all risks of direct physical loss or damage to insured property at insured locations during the policy period”. The court held that whatever this language meant the loss fell within the express exclusions for “faulty workmanship, material, construction or design, from any cause”. The exclusion did not apply “if physical loss or damage not otherwise excluded by this policy to insured property at insured location results, then only such resulting physical loss or damage is covered by this policy”. The insured said the defective bottle caps were not covered but the loss of the product inside the bottles was covered. The court said that the wording “raises some interpretive challenges”. The dispute was over what boundary the policy intended to draw between those property losses caused by faulty workmanship excluded from coverage and those “resulting losses” that were not. The court found that this was not a case where an excluded occurrence involving initial property damage led to other property damage of a different kind. To the extent that the insured suffered property damage that loss was directly caused by and completely bound up in the increased risk resulting from the poor seals. A problem with the bottle cap liners directly rendered the entire product unsaleable and the product fell squarely within the exclusion language. Please contact Thomas or Innocentia in our Short Term Department; email [email protected] , to get an All-risks policy quote Source.Financiainstitutions.com Question: I'm 42 years old and self-employed and I would like to have a retirement vehicle. Monthly I earn around R10 000 after my expenses and I would like to invest this money for retirement. Do you have any suggestion?
Answer Johan Stadler from FNB Financial Advisory division: As a self-employed client, the most suitable retirement vehicle could be a retirement annuity. This is a tax efficient vehicle for investors who wish to enjoy a certain standard of living when they are no longer employed. Contributions to a retirement annuity could either be in the form of a lump sum amount or monthly contributions. We generally advise our clients to carefully consider their retirement goals and make financial contributions that will help them meet those goals. It is important to always consider your financial circumstances as an individual and to ensure the contribution is always affordable and in line with your goals.As a business owner, it is even more important to consider self-funding of your retirement savings due to the fact that you may not be contributing to a company pension fund. You probably see your business as part of your retirement plan in the sense that you can sell it at some stage to unlock your wealth. This is not always an easy option and very often, business transfers are complicated. The future value, provided you find a willing and able buyer, is not certain.Over and above simply considering retirement savings, we would suggest that you also consider succession planning and the impact of your business on your personal estate. Each and every situation is unique and your personal circumstances will influence the solution that is best suited to you. We strongly advise that you consult a financial planner who will conduct a thorough needs-analysis and provide advice according to your individual goals and current financial position. Please contact Kevin or Thato in our Life Department; email [email protected] , to get a retirement annuity quote Source: Fin24 Over the past few years, developments in the healthcare industry have led to a series of consolidations and amalgamations amongst medical schemes; a trend that is expected to continue.
It is in light of this trend, that Bonitas Medical Fund (‘Bonitas’) and Liberty Medical Scheme (‘LMS’) began discussions in 2015 with a view to exploring potential synergies and benefits of an amalgamation for the beneficiaries of the schemes. The Boards of Trustees of Bonitas and LMS commissioned preliminary investigations into a possible amalgamation between the two schemes. The results of these feasibility studies were carefully evaluated and both Boards voted in favour of pursuing an amalgamation. While these merger negotiations are now at an advanced stage, member consultation has yet to take place and other remaining regulatory processes still need to be satisfied in order for the amalgamation to be ratified. The amalgamation will constitute the largest transaction of its kind in South Africa and will further entrench Bonitas’ role as a leader in the healthcare market. It will reinforce our size and enhance our ability to negotiate improved benefits and services with healthcare providers to ensure our members have access to affordable, quality healthcare. A Special General Meeting will be held on 20 April 2016 from 09h00 to 14h00 at Orion Safari Lodge, Donkerhoek Road, Rustenburg Kloof, North West Province (GPS: S 25°41'10” E 027°11'46") for members to cast their vote. Subject to the approval of all regulatory requirements, the newly merged scheme will commence operations on 1 August 2016. We will keep you updated on the progress of the amalgamation as and when new developments take place Click here for explanation on some queries Please contact Namhla or Judy in our Health Department, email [email protected] , to get a Bonitas or Liberty Health quote Source: Bonitas ![]() With the threat of recession looming, brokers need to be aware that consumers are bearing the brunt of increasing prices and a weaker rand, that may lead to them moving to a cheaper medical aid option with less coverage. Dr Bobby Ramasia, principal executive officer of Bonitas Medical Fund, cautions strongly against choosing a medical aid plan based on solely on your pocket. “The best medical aid option is one you can afford which best covers the healthcare needs of your family. Choosing the right medical aid option is really balancing a member’s financial circumstances on the one hand with the family’s health status on the other. If members choose the least expensive option, they may find that their benefits run out before the end of the year and that claims are not being paid. Members will then have to begin paying for medical expenses from their own pockets.” But why is healthcare inflation rising at such an alarming rate? Dr Ramasia says that “Healthcare inflation still outpaces general economic inflation in South Africa and while the jury is out in the form of market inquiry into the private healthcare sector, fingers are being pointed at all role players from private hospitals and specialists to medical schemes. While the former are all about the bottom line, medical schemes are not-for-profit. However, as contributions grow every year so has criticism.” According to the Council for Medical Schemes (CMS), the market has not been successful in attracting young, healthy people. Younger adults are less prone to chronic health conditions like diabetes or hypertension, lifestyle diseases that adversely effect of the pool of contributions. The increasing age of beneficiaries is also a concern. The CMS reported that average beneficiary age increased from 31.9 years in 2013 to 32.1 years in 2014. Schemes with an ageing membership base generally experience an increase in claims cost in excess of inflation on account of higher usage of benefits. Bonitas Medical Fund estimates that members claim approximately 2 per cent more each year. Almost all chronic conditions have shown an upswing over the past few years. These conditions are included on the list of prescribed minimum benefits (PMBs) that need to be paid in full by all schemes. The full weight of this has to be borne by schemes as the prices healthcare providers charge to treat these chronic conditions are not regulated. Schemes are then forced to pass on these costs to members in the form of higher contributions. At the same time, there have been particularly steep increases in the cost of specialists and hospitals, which together account for more than 61 per cent of total claims paid. This is further compounded by the over-reliance of some specialists on modern technology and tests which only add to the cost of treatment. Runaway healthcare costs have various contributing factors, many of which are beyond the influence of schemes. This leaves schemes with no option but to negotiate individually on all price increases with service providers, blocking the development of a more efficient and cost-effective healthcare sector. But what then is the best approach for medical schemes to take? Dr Ramasia explains, “Bonitas continues to explore and implement solutions to limit contribution increases as far as possible so that our members can still afford quality healthcare cover. Managed care interventions, family practitioner upskilling and partnering with quality service providers are crucial to cost-containment.” Please contact Namhla or Judy in our Health Department, email [email protected] , if you have any queries about Vitality or Medical Aid Source: FA News Despite announcing personal income tax relief of R5.5bn for lower- and middle-income earners, the National Budget speech was a stark reminder that consumers need to get used to doing more with less, according to Ester Ochse, channel head at FNB Financial Advisory.
Ochse said financial discipline is crucial because consumers still have to deal with the rising cost of living. She pointed to the gradual rise in food prices, the fuel levy, electricity and interest rates. “These are stressful financial times which require every individual to scrutinise their budgets a lot closer. Regardless of the positive message about attempts to boost our economy, the reality is that this will be a financially challenging year for a lot of people due to the consistent rise in the cost of living,” said Ochse. How to keep head above water To keep head above the water, she said consumers have to cultivate good financial habits. These include reassessing your financial position; curbing impulsive spending; where possible, boosting cash reserves through savings or investments; improving your management of credit commitments and avoiding excessive debt. “Currently, financial planning is a non-negotiable. Consumers need to consider using a qualified financial adviser to help them structure finances. It’s important for individuals to realise that knee-jerk cost-cutting could have unintended consequences, therefore proper financial analysis is necessary,” said Ochse. The Consumer Goods Council of South Africa (CGCSA) has welcomed the broad thrust of the budget presented by Finance Minister Pravin Gordhan, in particular the commitment to fiscal prudence, improving the performance of state owned enterprises and the planned infrastructure spending over the next three years. The CGCSA noted government’s commitment to increase budgetary allocations for social grants, which continue to provide a significant safety net for the aged, poor and unemployed. "At the same time, the tax proposals will help raise additional funding for government even though some of them may have a direct impact on consumer spending, which is already under pressure from rising food prices as a result of the impact of the drought," the council said on Wednesday. The CGCSA has noted the proposed introduction of a tax on sweetened sugary drinks and plastic bags. It will seek further clarification from the Department of Health on the so-called "sugar tax". The CGCSA also agrees with Gordhan on the need for regular and on-going consultation between the government and the business sector in order to find common solutions to ensure sustained economic growth and success. In particular, the council has been stressing the importance of policy certainty and regulatory impact assessments before policies become law. "We look forward to further engagement with the relevant Government departments as we partner to address policy issues needed to boost business confidence, attract investment and create jobs in line with the National Development Plan," the council said. Click here to read more Please contact Su-Lan or Su-Chin, Tel 011 658 1333, email [email protected] to get assistance with your Tax returns Source: Fin24 The Discovery Dollar Capital Plus Fund
Discovery Invest has just introduced a new structured fund, the Discovery Dollar Capital Plus Fund, which provides investors with exposure to the performance of the US and European equity markets in US Dollars. The Discovery Dollar Capital Plus Fund is based on a global portfolio comprising 30% S&P 500 and 70% Eurostoxx 50 indices, with a minimum return in US Dollars of 40%, if the return of the global portfolio is flat or positive at the end of five years. Some capital protection in US Dollars is provided for falls in the global portfolio of up to 30% during the five-year term. The Discovery Dollar Capital Plus Fund opened on Monday, 22 February 2016. This offer will expire when capacity runs out but will not be available later than 8 April 2016. Please see the Discovery Dollar Capital Plus Fund Factsheet for more information on this special offer. If you are interested in investing in this special offer, please speak to Kevin Yeh or Thato Merementsi to apply, email [email protected], Tel 011-658-1333 or 083-633-4671. Introducing the R12/$1 Life Plan Limited Offer! Buy a Dollar Life Plan policy before 31 March 2016, and get a guaranteed exchange rate of R12/$1 on your premium for the next three years! In November 2014, Discovery Life launched the Dollar Life Plan, a first-to-market offshore life insurance policy that offers clients comprehensive risk protection in US dollars. With the Dollar Life Plan, clients can be sure that their risk protection will remain relevant in the long term, regardless of their changing lifestyle needs. Why offshore life insurance makes sense: 1. Sound long-term financial planning With an offshore life insurance policy, denominated in US dollars, clients are protected against the financial impact of a life-changing event – no matter where they may find themselves in the future. 2. Matching liabilities Many clients either have, or could in the future have, offshore liabilities such as a bond, children’s education costs or estate duty in a foreign country. Clients may also be impacted by a fluctuating rand, which typically results in an increase in the cost of goods and services available locally. Risk protection denominated in dollars is therefore critical to ensure that a client’s liabilities are fully matched. 3. Diversification Discovery Life provides an efficient vehicle for clients to supplement and diversify their retirement savings into offshore markets by allowing them to convert their future health and wellness into a tangible offshore financial asset. Clients can further supplement their retirement savings in dollars through three unique features:
The minimum premium on the Dollar Life Plan has been reduced to $50 per month. This allows more clients to access the benefits of an offshore life insurance policy. You can increase the value of the rand with future certainty! For a limited time only, you will be able to pay the premiums on a new Dollar Life Plan at a substantially lower exchange rate than the market. You will be charged a premium based on a maximum exchange of R12/$1 for the first three years of their policy. This is provided that the exchange rate remains less than R20/$1 And if the exchange rate is higher than (or equal to) R20/$1, you will be charged a premium based on an exchange rate that is 20% less than the rest of the market. For more information, refer to this brochure and limited offer technical document. If you are interested in investing in this special offer, please speak to Kevin Yeh or Thato Merementsi to apply, email [email protected], Tel 011-658-1333 or 083-633-4671. Source: Discovery |
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