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McKinsey predicts much slower recovery for insurers - will it lead to consolidation?

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Analysts expect that drawn-out recovery could lead to some consolidation in the insurance sector.
Photo: Getty Images
Analysts expect that drawn-out recovery could lead to some consolidation in the insurance sector. Photo: Getty Images

South African insurers are in for a long recovery. Management consulting firm McKinsey doesn't see them writing the same policies as they were before Covid-19 until at least 2024.

McKinsey, whose modelling of the insurance sector's recovery was based on GDP and unemployment projections in the country, said Covid-19 was expected to have double the impact that the 2008/09 global financial crisis had on local insurers. Their model suggested that the total premiums across the sector would fall by 15 percent over the next two years, only returning to pre-pandemic levels by 2024.

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