This paper discusses the role of voluntary health insurance (VHI) in relation to public healthcare systems and universal health coverage (UHC). The paper explores why VHI markets are particularly susceptible to anti-selection. As the largest VHI market globally, the South African medical scheme market is then examined in detail. An overview of the history of the South African healthcare system provides insight into the development of the medical scheme market. Thereafter, an analysis on the impact of anti-selection on medical schemes is conducted using the experience from the largest open medical scheme in the market. The results demonstrate how existing risk mitigation measures are ineffective at protecting medical schemes from the effects of anti-selection, and the subsequent negative impacts of this phenomenon on the industry and the healthcare system as a whole. The paper discusses alternative mechanisms for addressing anti-selection risks and concludes that mandatory membership in some form has the potential to improve the sustainability of medical schemes in South Africa, which will in turn support the country’s transition towards UHC.
{"title":"Anti-selection in voluntary health insurance markets: A focus on medical schemes in South Africa","authors":"R. Harris, S. Besesar","doi":"10.4314/saaj.v21i1.5","DOIUrl":"https://doi.org/10.4314/saaj.v21i1.5","url":null,"abstract":"This paper discusses the role of voluntary health insurance (VHI) in relation to public healthcare systems and universal health coverage (UHC). The paper explores why VHI markets are particularly susceptible to anti-selection. As the largest VHI market globally, the South African medical scheme market is then examined in detail. An overview of the history of the South African healthcare system provides insight into the development of the medical scheme market. Thereafter, an analysis on the impact of anti-selection on medical schemes is conducted using the experience from the largest open medical scheme in the market. The results demonstrate how existing risk mitigation measures are ineffective at protecting medical schemes from the effects of anti-selection, and the subsequent negative impacts of this phenomenon on the industry and the healthcare system as a whole. The paper discusses alternative mechanisms for addressing anti-selection risks and concludes that mandatory membership in some form has the potential to improve the sustainability of medical schemes in South Africa, which will in turn support the country’s transition towards UHC.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41597037","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
During the 20th century, government statistical departments in South Africa produced nine complete life tables for the white population group, seven complete life tables for the coloured population group, six complete life tables for the Asian population group and no complete life tables for the African population group. As of 2020, the South African Life Tables 1979/1981 for the white population group are still used in capitalising pensions in terms of the Compensation for Occupational Injuries and Diseases Act No. 130 of 1993. Similarly, the South African Life Tables 1984/1986 for the white population group are still used extensively in damages calculations by South African actuaries. This paper provides a historical record of the nine complete life tables for the white population group and provides a forecast of those tables to 2020. The aim of the forecast is to provide an estimate for current white population mortality rates which could then serve as a non-racial mortality basis for damages claims. It also aims to complement the work of demographers in their development of new population tables based on more sophisticated demographic techniques.
{"title":"A history and forecast of the South African life tables No. E1 to No. E9","authors":"G. Whittaker","doi":"10.4314/saaj.v21i1.1","DOIUrl":"https://doi.org/10.4314/saaj.v21i1.1","url":null,"abstract":"During the 20th century, government statistical departments in South Africa produced nine complete life tables for the white population group, seven complete life tables for the coloured population group, six complete life tables for the Asian population group and no complete life tables for the African population group. As of 2020, the South African Life Tables 1979/1981 for the white population group are still used in capitalising pensions in terms of the Compensation for Occupational Injuries and Diseases Act No. 130 of 1993. Similarly, the South African Life Tables 1984/1986 for the white population group are still used extensively in damages calculations by South African actuaries. This paper provides a historical record of the nine complete life tables for the white population group and provides a forecast of those tables to 2020. The aim of the forecast is to provide an estimate for current white population mortality rates which could then serve as a non-racial mortality basis for damages claims. It also aims to complement the work of demographers in their development of new population tables based on more sophisticated demographic techniques.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48145091","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The role of an amicus curiae as a party to litigation is closely linked to promoting constitutional values and protecting the public interest. There is no question that interventions by amici curiae have played a critical role in aiding the judiciary in many public interest cases. The Actuarial Society of South Africa is prioritising its focus on advancing issues of public interest and serving a broader spectrum of the populace. However, it has yet to utilise this specific mechanism to manifest this mandate. The Actuarial Society of South Africa can provide a numerical perspective on various rights disputes deriving from the Constitution. In contrast, the courts have asked other professional bodies, such as the South African Institute of Chartered Accountants, to join proceedings. Actuarial bodies, particularly those in the United States of America, are actively involved in public interest matters and occasionally join amicus curiae proceedings. Following an exploration of the use of amici curiae in South African and African courts, this paper seeks to identify a test case where the Actuarial Society of South Africa may join proceedings as a friend of the court. The mechanism and procedure for joining the court as an amicus curiae and the risks and benefits of joining proceedings are examined.
法庭之友作为诉讼当事人的作用与促进宪法价值观和保护公共利益密切相关。毫无疑问，法庭之友的干预在协助司法部门处理许多公共利益案件方面发挥了关键作用。南非精算学会（Actuarial Society of South Africa）正将重点放在推进公共利益问题上，并为更广泛的民众服务。然而，它尚未利用这一具体机制来体现这一授权。南非精算协会可以从数字角度看待《宪法》引发的各种权利纠纷。相比之下，法院已要求南非特许会计师协会等其他专业机构加入诉讼程序。精算机构，特别是美利坚合众国的精算机构，积极参与公共利益事务，偶尔也会加入法庭之友程序。在探索了法庭之友在南非和非洲法院的使用之后，本文试图确定一个测试案例，在该案例中，南非精算协会可以作为法院之友加入诉讼程序。审查了作为法庭之友加入法院的机制和程序，以及加入诉讼程序的风险和好处。
{"title":"The actuary as amicus curiae","authors":"G. Whittaker","doi":"10.4314/saaj.v22i1.3","DOIUrl":"https://doi.org/10.4314/saaj.v22i1.3","url":null,"abstract":"The role of an amicus curiae as a party to litigation is closely linked to promoting constitutional values and protecting the public interest. There is no question that interventions by amici curiae have played a critical role in aiding the judiciary in many public interest cases. The Actuarial Society of South Africa is prioritising its focus on advancing issues of public interest and serving a broader spectrum of the populace. However, it has yet to utilise this specific mechanism to manifest this mandate. The Actuarial Society of South Africa can provide a numerical perspective on various rights disputes deriving from the Constitution. In contrast, the courts have asked other professional bodies, such as the South African Institute of Chartered Accountants, to join proceedings. Actuarial bodies, particularly those in the United States of America, are actively involved in public interest matters and occasionally join amicus curiae proceedings. Following an exploration of the use of amici curiae in South African and African courts, this paper seeks to identify a test case where the Actuarial Society of South Africa may join proceedings as a friend of the court. The mechanism and procedure for joining the court as an amicus curiae and the risks and benefits of joining proceedings are examined.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45939711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Where a widowed person has a legal claim for support following the death of their spouse, their compensation may be reduced to allow for the possibility of remarriage. This reduction, known as a remarriage contingency, accounts for both the probability of remarriage and the change in financial status on remarriage. The only South African tables available are viewed as outdated and focus only on widows. This research uses data from the National Income Dynamics Survey to find updated remarriage contingencies for South African widows and widowers. The data indicate that age and race may influence the remarriage probabilities although this result may have been influenced by poor income and child data. The remarriage contingencies calculated were lower than the old tables for widowed whites and younger coloureds but higher for widowed Africans, Asians and older coloureds. The remarriage contingencies calculated were high relative to the general post-settlement contingency of 15% suggesting that there may still be scope for an explicit remarriage contingency.
{"title":"Updated remarriage contingency deductions for widowed South Africans","authors":"A. Channa, J. Yuan, Mbj Carswell","doi":"10.4314/saaj.v21i1.3","DOIUrl":"https://doi.org/10.4314/saaj.v21i1.3","url":null,"abstract":"Where a widowed person has a legal claim for support following the death of their spouse, their compensation may be reduced to allow for the possibility of remarriage. This reduction, known as a remarriage contingency, accounts for both the probability of remarriage and the change in financial status on remarriage. The only South African tables available are viewed as outdated and focus only on widows. This research uses data from the National Income Dynamics Survey to find updated remarriage contingencies for South African widows and widowers. The data indicate that age and race may influence the remarriage probabilities although this result may have been influenced by poor income and child data. The remarriage contingencies calculated were lower than the old tables for widowed whites and younger coloureds but higher for widowed Africans, Asians and older coloureds. The remarriage contingencies calculated were high relative to the general post-settlement contingency of 15% suggesting that there may still be scope for an explicit remarriage contingency.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46910560","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we present guidelines for safe withdrawal rates from a living annuity (income drawdown accounts), periodically, to cover living expenses. In essence, a retiree is faced with the risk management problem of outliving their retirement fund (withdrawing too much) versus living below their means (withdrawing too little). The empirical evidence in the literature advocates for a ‘safe’ 4% annual withdrawal (or spending) rate. Therefore, the object of this paper is to examine withdrawal rates for retirees in the South African economy. Furthermore, we carry out a simulation study using historical data while incorporating longevity and fund management fees. Our analysis emphasises the risks associated with different withdrawal rates and asset allocations. We then give an example of how derivative instruments can increase the success rate of a retirement portfolio.
{"title":"Quantitative guidelines for retiring (more safely) in South Africa","authors":"Vaughan van Appel, E. Maré, Andries Van Niekerk","doi":"10.4314/saaj.v21i1.4","DOIUrl":"https://doi.org/10.4314/saaj.v21i1.4","url":null,"abstract":"In this paper we present guidelines for safe withdrawal rates from a living annuity (income drawdown accounts), periodically, to cover living expenses. In essence, a retiree is faced with the risk management problem of outliving their retirement fund (withdrawing too much) versus living below their means (withdrawing too little). The empirical evidence in the literature advocates for a ‘safe’ 4% annual withdrawal (or spending) rate. Therefore, the object of this paper is to examine withdrawal rates for retirees in the South African economy. Furthermore, we carry out a simulation study using historical data while incorporating longevity and fund management fees. Our analysis emphasises the risks associated with different withdrawal rates and asset allocations. We then give an example of how derivative instruments can increase the success rate of a retirement portfolio.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42900473","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study is on the 2.5% real discount rate used to calculate the lump sum payment in the event of a compensation claim. The aptness of this 2.5% real discount rate is assessed through a statistical analysis of government bonds and inflation data over the past 59 years. The investigation yields evidence that the discount rate over the last 59 years may be mean reverting and would be a good approximation to use in the future. Also, an interesting relationship was found between the introduction of inflation targeting in the year 2000 and the stationarity of the series. It must be considered that the timing and duration of variation from the 2.5% cannot be predicted, but reversion to the series mean seems to always occur. The practice of using the 2.5% in the South African context is also compared to other practices globally. Finally, circumstances for the departure from the 2.5% discount rate are investigated, with some suggestions.
{"title":"Suitability of the 2.5% net discount rate for quantum of damage calculations in South Africa","authors":"F. Koning, JP Swanepoel, JD Brits, E. Maré","doi":"10.4314/saaj.v22i1.1","DOIUrl":"https://doi.org/10.4314/saaj.v22i1.1","url":null,"abstract":"This study is on the 2.5% real discount rate used to calculate the lump sum payment in the event of a compensation claim. The aptness of this 2.5% real discount rate is assessed through a statistical analysis of government bonds and inflation data over the past 59 years. The investigation yields evidence that the discount rate over the last 59 years may be mean reverting and would be a good approximation to use in the future. Also, an interesting relationship was found between the introduction of inflation targeting in the year 2000 and the stationarity of the series. It must be considered that the timing and duration of variation from the 2.5% cannot be predicted, but reversion to the series mean seems to always occur. The practice of using the 2.5% in the South African context is also compared to other practices globally. Finally, circumstances for the departure from the 2.5% discount rate are investigated, with some suggestions.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43005029","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, the author reflects on his experiences of giving expert actuarial witness in the Land Claims Court regarding the calculation of financial compensation as an alternative to the restoration of dispossessed land. As no specific formula for compensation has been legislated in South Africa’s land reform programme, relevant case histories are examined in which the common law has been developed. The technical, ethical and professional inputs which an actuary can provide are reviewed. The author concludes that actuaries are well suited to assist the Land Claims Court to resolve the potentially large number of claims, and that this will be in the public interest.
{"title":"‘Where angels fear to tread’—Reflections on the role of an actuary as expert witness in the Land Claims Court","authors":"MW Lowther","doi":"10.4314/saaj.v22i1.2","DOIUrl":"https://doi.org/10.4314/saaj.v22i1.2","url":null,"abstract":"In this paper, the author reflects on his experiences of giving expert actuarial witness in the Land Claims Court regarding the calculation of financial compensation as an alternative to the restoration of dispossessed land. As no specific formula for compensation has been legislated in South Africa’s land reform programme, relevant case histories are examined in which the common law has been developed. The technical, ethical and professional inputs which an actuary can provide are reviewed. The author concludes that actuaries are well suited to assist the Land Claims Court to resolve the potentially large number of claims, and that this will be in the public interest.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45896094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
It is well known that interest rate risk is a dominating factor when pricing long-dated contingent claims. The Heston stochastic volatility model fails to capture this risk as the model assumes a constant interest rate throughout the life of the claim. To overcome this, the risk-free interest rate can be modelled by a Hull-White short rate process and can be combined with the Heston stochastic volatility model to form the so-called Heston-Hull-White model. The Heston-Hull-White model allows for correlation between the equity and interest rate processes, a component that is important when pricing long-dated contingent claims. In this paper, we apply the Heston-Hull-White model to price Guaranteed Minimum Maturity Benefits (GMMBs) and Guaranteed Minimum Death Benefits (GMDBs) offered in the life insurance industry in South Africa. We propose a further extension by including stochastic mortality rates based on either a continuous-time Cox-Ingersoll-Ross short rate process or a discrete-time AR(1)-ARCH(1) model. Our findings suggest that stochastic interest rates are the dominating factor when reserving for GMMB and GMDB products. Furthermore, a delta-hedging strategy can help reduce the variability of embedded derivative liabilities.
{"title":"An economic scenario generator for embedded derivatives in South Africa","authors":"A. Levendis, E. Maré","doi":"10.4314/saaj.v22i1.4","DOIUrl":"https://doi.org/10.4314/saaj.v22i1.4","url":null,"abstract":"It is well known that interest rate risk is a dominating factor when pricing long-dated contingent claims. The Heston stochastic volatility model fails to capture this risk as the model assumes a constant interest rate throughout the life of the claim. To overcome this, the risk-free interest rate can be modelled by a Hull-White short rate process and can be combined with the Heston stochastic volatility model to form the so-called Heston-Hull-White model. The Heston-Hull-White model allows for correlation between the equity and interest rate processes, a component that is important when pricing long-dated contingent claims. In this paper, we apply the Heston-Hull-White model to price Guaranteed Minimum Maturity Benefits (GMMBs) and Guaranteed Minimum Death Benefits (GMDBs) offered in the life insurance industry in South Africa. We propose a further extension by including stochastic mortality rates based on either a continuous-time Cox-Ingersoll-Ross short rate process or a discrete-time AR(1)-ARCH(1) model. Our findings suggest that stochastic interest rates are the dominating factor when reserving for GMMB and GMDB products. Furthermore, a delta-hedging strategy can help reduce the variability of embedded derivative liabilities.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43124858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Remittance arrangements, or inter-household transfers in cash or kind, have been identified as an influential factor in funeral insurance purchase decisions of South African households. On the one hand, remittances can alter income and higher levels of income are associated with more insurance purchases. On the other hand, remittances can act as an informal insurance arrangement reducing formal insurance purchases. It was found using data from the fifth wave of the National Income Dynamics Study that remittances did not have a strong effect on life insurance purchases generally although for young, low-income, unbanked African and other households, receiving remittances may have discouraged life insurance purchases.
{"title":"The impact of giving and receiving remittances on life insurance purchases","authors":"H. Jeaven, R. Wapnick, Mbj Carswell","doi":"10.4314/saaj.v21i1.2","DOIUrl":"https://doi.org/10.4314/saaj.v21i1.2","url":null,"abstract":"Remittance arrangements, or inter-household transfers in cash or kind, have been identified as an influential factor in funeral insurance purchase decisions of South African households. On the one hand, remittances can alter income and higher levels of income are associated with more insurance purchases. On the other hand, remittances can act as an informal insurance arrangement reducing formal insurance purchases. It was found using data from the fifth wave of the National Income Dynamics Study that remittances did not have a strong effect on life insurance purchases generally although for young, low-income, unbanked African and other households, receiving remittances may have discouraged life insurance purchases.","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45512623","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
As the Fourth Industrial Revolution (4IR) continues to change the ways of doing business across industries, organisations around the world are grappling with the unprecedented challenges imposed by radical and widespread technological change. In the face of this dilemma, the South African life insurance industry has remained remarkably resilient, exhibiting very little adaptation in terms of structural, cultural, or business model innovation. However, the stable environmental conditions that once enabled this position for incumbent organisations are weakening. Transformational change, like that in the adjacent financial services industry, is imminent and adaptation on the part of incumbent insurers will be vital to sustaining relevance. This research examines the organisational beliefs and capabilities of South African insurance companies regarding the 4IR in order to gauge the current challenges within the broader industry. Semi-structured interviews were conducted with 12 senior leaders and decisionmakers from across the industry. A qualitative inductive analysis shows the inhibitors and enablers of digital innovation within the organisations. The pervasive lack of trust, agility, and urgency within the sector are cited as inhibitors of digital innovation. Enablers include a continuous learning mindset within the organisation, partnerships within the broader ecosystem, and the role of senior leaders for shaping cultural attitudes and structures. Overall, these findings show a disparity between what insurers know they must do to proactively lead change, enact digital innovation, and remain relevant, and what they are actually executing. Recommendations are provided for addressing this gap. Keywords: Fourth Industrial Revolution; life insurance; strategy; leadership; agility
{"title":"Sustaining the life insurance industry in the Fourth Industrial Revolution","authors":"Lynn Molloy, L. Ronnie","doi":"10.4314/SAAJ.V20I1.4","DOIUrl":"https://doi.org/10.4314/SAAJ.V20I1.4","url":null,"abstract":"As the Fourth Industrial Revolution (4IR) continues to change the ways of doing business across industries, organisations around the world are grappling with the unprecedented challenges imposed by radical and widespread technological change. In the face of this dilemma, the South African life insurance industry has remained remarkably resilient, exhibiting very little adaptation in terms of structural, cultural, or business model innovation. However, the stable environmental conditions that once enabled this position for incumbent organisations are weakening. Transformational change, like that in the adjacent financial services industry, is imminent and adaptation on the part of incumbent insurers will be vital to sustaining relevance. This research examines the organisational beliefs and capabilities of South African insurance companies regarding the 4IR in order to gauge the current challenges within the broader industry. Semi-structured interviews were conducted with 12 senior leaders and decisionmakers from across the industry. A qualitative inductive analysis shows the inhibitors and enablers of digital innovation within the organisations. The pervasive lack of trust, agility, and urgency within the sector are cited as inhibitors of digital innovation. Enablers include a continuous learning mindset within the organisation, partnerships within the broader ecosystem, and the role of senior leaders for shaping cultural attitudes and structures. Overall, these findings show a disparity between what insurers know they must do to proactively lead change, enact digital innovation, and remain relevant, and what they are actually executing. Recommendations are provided for addressing this gap. \u0000Keywords: Fourth Industrial Revolution; life insurance; strategy; leadership; agility","PeriodicalId":40732,"journal":{"name":"South African Actuarial Journal","volume":null,"pages":null},"PeriodicalIF":0.2,"publicationDate":"2021-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44091535","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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