May 28, 2011
Broker Confidence Index And South Africa
Insurance brokers are not offering any votes of confidence in the South African economy. Results from a survey taken in the past week of the fourth quarter of 2011, show a drop from 66% in the broker confidence rating to 61% as of the last quarter of 2010, CIB Insurance stated that this is the main reason for the lull in support from the Broker Confidence Index (BCI) Survey.
South Africa had been experiencing an economic boom since the dismantling of Apartheid. Today the problems of economic slow down are far reaching, as South Africa’s central bank is set to continue the current benchmarked interest rates, leaving them unchanged. This is a measure to shore up the recovery of Africa’s largest economy. South Africa is considered an upper middle class economy in the continent of Africa.
South Africa has made great strides in the past three decades, economically, but is now struggling to maintain its past form as is the case with many other small to large economies. The survey of the BCI indicates perpetuating gloom as it illustrates how brokers have continued to become more jaded about South African business conditions within the neighborhood insurance industry for at least another 12 months. The last quarter business climate was somewhat elevated, owing this mild high to the shopping season of the global holidays. Once this season passed the rates followed suite by 5% to the negative with the 2010 forth quarter BCI rating of 67% falling to 62% in the first quarter of 2011.
The broker’s survey measures how they make their assumptions. Other survey indicators, such as the Broker Confidence Index for attracting new businesses in the next 12 month period to South Africa, are considered. This index also fell five points from 76% in the last quarter of 2010. It is currently at 71% based on the last day of the first quarter of 2011.
The most common method that insurance brokers use to measure confidence levels is taken while new clients are shopping for and buying their products. Insurance prospecting has fallen off in general. This trend highlights the fact that the once touted recovery is not real. More brokers are suggesting that they do not expect consumers to increase spending.
What brokers are mildly relieved to notice is that they do feel confident that they will maintain their 2011 customer base with their expression of 79% BIC for their ability to retain these clients. One hint of optimism shows that brokers feel some confidence that they will conserve their current client base. This was indicated as a 1% increase this quarter from the 2010 forth quarter.
Brokers find themselves facing the challenge to maintain their confidence levels in the face of new government legislation and regulations. The financial services board regulatory exam is threatening to destabilize an already weak market. Key players in the Insurance industry must complete this first level exam by December 2011. This fast approaching deadline is the source of discomfort and uncertainty among the brokers.
Getting more insurance quotes than just the main companies has always been challenging. Be sure to comparison shop in order to get more affordable car insurance quotes.
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