South Africa is a study of contrasts. Its financial sector is among the world’s most developed and sophisticated, yet the country of roughly 50 million inhabitants is plagued with large scale unemployment, poverty and inequality. It ranks 15th in market capitalization, yet 109th in per capita income. Executive SummaryA country of contrasts, South Africa has tremendous potential, as well as problems. Insurance penetration is high, but not in the non-life sector. Slow economic growth and high unemployment, however, are among the country’s biggest issues.
South Africa, with a gross domestic product (GDP) of $592 billion, is the world’s 26th largest economy and by far the largest economy on the African continent. South Africa alone represented 22 percent of the entire continent’s GDP in 2011.
With an expanding middle class, low barriers to entry and no prohibition to foreign investment, South Africa represents a good opportunity for insurers. Moreover, it serves as an excellent springboard for expansion into the rest of Africa, which has extraordinarily low insurance penetration.