SA households and businesses are grappling with a multitude of challenges, including a persistently tough economic environment, crime, infrastructure risks and climate change-related weather volatility.
This is according to the 2025 Santam Insurance Barometer Report, which surveyed about 900 consumers, businesses and brokers from across SA.
The report examines SA’s changing risk landscape, highlighting its effect on insurance needs and behaviours, while also exploring industry adaptations to meet new challenges and customer expectations.
Consumers across the country are feeling the direct effect of these challenges, with 84% of those surveyed reported having to adjust their spending habits due to the rising cost of living. Of those, 40% were cutting back on non-essential items such as entertainment and dining out. Despite these financial pressures, short-term insurance remains a priority for most households, with only 1% indicating they had reduced their insurance coverage.
Crime continues to be a growing concern. The report notes a 16% increase in the number of respondents who cited crime as one of their top three risks compared with the previous year. Theft of personal electronics, particularly in public spaces such as shopping malls, has contributed to a rise in related insurance claims. This trend shows the ongoing societal challenges that households face and the importance of insurance products that address these risks.
Climate change and extreme weather events also remained a worry. While 78% expressed concern about the threat of such events, only 24% reported taking proactive steps to mitigate these risks, such as maintaining their homes or clearing gutters. Notably, claims related to geyser damage remain prevalent, reflecting the vulnerability of household infrastructure to weather-related wear and tear.
Infrastructure risks, particularly road infrastructure, are also a major concern.
From a business perspective, theft remains the foremost risk, though its prominence has decreased over the past five years due to improved risk management strategies. Concerns about machinery and systems breakdown have increased, likely reflecting the rising operational costs that many companies face.
Interestingly, the report notes that business interruption risk appears to be underappreciated, with only 7% of businesses listing it among their top concerns, despite its critical importance globally. This gap in risk awareness could leave some companies vulnerable to losses in the event of operational disruptions.
Load-shedding, once a major concern for businesses, has seen a decline in perceived risk after improvements in energy supply stability. This has resulted in fewer related insurance claims, signalling some progress in addressing one of SA’s long-standing infrastructure challenges. However, climate change remains a concern, especially in the agriculture sector, where 64% of respondents identified it as a major risk.
These risks are compounded by global uncertainty and local economic challenges, including high inflation and interest rates, creating a complex environment that demands innovative responses from insurers and their clients alike.
The economic environment continues to place pressure on businesses, with 54% reporting increased operating costs, 51% experiencing reduced profit, and 46% having to raise prices for customers. Fuel price hikes have had a particularly pronounced effect, with 61% of businesses citing higher costs and 25% reporting a decline in business volumes as a result.
To manage these pressures, many companies have implemented cost-cutting measures such as reducing transport expenses, freezing or cutting wages, and limiting travel. Despite these challenges, only a small fraction of businesses, about 3%, have reduced their insurance coverage, highlighting the perceived importance of maintaining protection.
The report also highlights the shifting nature of the broker from intermediary to risk management partner, as premiums rise to accommodate an increasingly complex risk environment.
“Brokers are spending more time counselling and guiding clients on effective risk mitigation strategies, despite onerous administration requirements still taking up a large portion of their capacity,” it read.
One emerging risk that required close attention was the planned decommissioning of 2G and 3G networks by 2027. These networks support many alarm and vehicle tracking systems, and their phase-out could increase vulnerability to crime if not managed carefully.
“Collaboration between insurers, clients, and telecommunications providers will be essential to mitigate this risk and ensure continuity of protection.”
To remain relevant, the report suggested insurers focus on delivering value beyond traditional insurance and improved client experience through operational excellence and risk management support.
“Digital adoption is critical to unlock the space for intermediaries to provide this, with seven in 10 respondents saying the best way for insurers to remain relevant is by providing meaningful risk management solutions and tools.”
The report concludes that insurers, brokers and policymakers needed to work together to address these challenges and provide the required support to South Africans.
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