SA insurers surpass R5trn assets milestone

South Africa’s long-term insurance industry has reached a historic financial landmark, with assets under management exceeding R5 trillion for the first time.

Driven by robust stock market performance throughout 2025, members of the Association for Savings and Investment South Africa (Asisa) concluded the year managing a record R5.2 trillion in assets.

The industry demonstrated significant capital resilience despite an evolving risk landscape. Life insurers collectively held R380.5 billion in reserves at the end of December 2025.

This surplus remains well above the Prudential Authority’s Solvency Capital Requirement (SCR) of R222.9 billion, resulting in a healthy average cover ratio of 1.71 times the legal requirement.

Read: The questions South Africans are asking about retirement – and what the evidence says

Gareth Friedlander, representing the Asisa Life and Risk Board Committee, noted that this SCR level ensures insurers are equipped to meet policyholder obligations even during catastrophic 1-in-200-year risk events.

During the reporting period, the industry fulfilled its primary mandate by paying out R626 billion in claims and benefits, assisting families through death, disability, and retirement transitions.

The rising shadow of risk policy lapses

While the industry’s balance sheet remains formidable, operational data reveals a concerning trend in consumer behaviour. After three years of steady decline, risk policy lapses are on the rise again.

In 2025 alone, 8.7 million risk policies lapsed, meaning policyholders ceased premium payments and lost their protection entirely, up from 8.2 million in 2024.

Friedlander emphasised that these lapses are a growing threat to national financial stability, as they widen South Africa’s already critical insurance gap. Current research indicates that formally employed earners in South Africa possess only enough life and disability cover to provide 39% of the income their families would actually need in a crisis.

Read: SA’s insurance gap balloons to R50.4trn

Shifting savings trends

The savings segment of the industry presented a more mixed picture. New individual recurring premium savings policies, such as retirement annuities and endowments, experienced a 5.5% slowdown, dropping to 537 203 policies.

However, in a positive shift for long-term wealth retention, the trend of policy surrenders continued to decline. The number of policyholders withdrawing fund values before maturity fell to 458 848 in 2025, marking a consistent four-year improvement from the high of 585 265 surrenders recorded in 2022.

Total in-force policies for the industry ended the year at 46.6 million, a 4% increase over the previous 12 months, reflecting a continued, albeit cautious, demand for private safety nets in an uncertain economic environment.

Read: SA life insurance sector reports robust health with R4.8trn in assets