South Africa has more than a hundred insurance companies listed with the department of insurance. Of these, 78 are long-term insurance companies while 97 companies deal with short term insurance. Old Mutual, Investec, Sanlam and the Momentum Group are the four biggest long-term insurance companies in the country. Santam is the biggest company in South Africa for short-term insurance. Short on its tails is Mutual & Federal, SA Eagle and Hollard.

South Africa also has some good direct insurers such as DialDirect.

South African insurance can be expensive relative to the rest of the world. Considering this, it is tempting to take the risk and go without any insurance at all. But before you opt for this, think about the situation in South Africa. Not only is our insurance premiums very high, but we have one of the highest crime rates in the world as well. Our public hospitals can be a nightmare. Our weather is unpredictable and disasters occur from time to time. Not to put our lovely country down, but the point I want to prove is that it is idiotic for any South African not to have insurance.

The market in South Africa has enough companies and options to promote healthy competition, but due to agent-principal problems the insurance company takes a huge risk when selling insurance. This is the main reason for the expensiveness of cover in the country. When undertaking a venture to carry someone else's risks, the company faces an even bigger risk. This risk has to be financed and the way to do it is via premiums. In other words, the company has to think about itself and its own financial well-being in the first place before it can provide cover for its clients. The financing of risks pushes the prices of premiums tremendously.

The internet provided an answer to expensive insurance quotes. Although insurance is so expensive in South Africa, it is still cheaper than facing the risks of not being insured.


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