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Investment Indicators - 19 March 2018 |
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Paul Kruger
Author/Editor |
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Procrastination is like a credit card; it is a lot of fun until you get the
bill
– Christopher Parker |
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Distributed to 51,228 subscribers.
To advertise with us
click here |
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| Rates Review |
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1. Secured Investment Rates |
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Please note that (G) indicates a Guaranteed and (L) a Linked product. In order to understand the difference between guaranteed and linked rates,
kindly click here for an explanation. |
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Company |
This Week |
Last Week |
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Clientéle Life (L) |
6.720% |
6.720% |
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2 |
1Life (L) |
6.650% |
6.630% |
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3 |
Assupol (G) |
6.110% |
6.060% |
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Company |
This Week |
Last Week |
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Clientéle Life (L) |
6.820% |
6.820% |
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2 |
1Life (L) |
6.650% |
6.630% |
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Assupol (G) |
6.540% |
6.490% |
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2. Money Market Funds |
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Please bear in mind that our figures, though based on the actual quotations that you also use, are for information purposes only,
and can never replace the official quotation from the product house. In terms of the guarantees, you are requested
to clarify the exact extent of such guarantees with the product house prior to advising clients. |
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From the Crow's Nest |
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Long term Insurance Industry Statistics 2017 |
Every year when I read these statistics, I wonder whether there is
enough appreciation in government circles for the contribution made
by the industry to alleviate the burden on the state.
The
2017 long-term insurance industry statistics released on 14 March 2018 by the Association for Savings and Investment South
Africa (ASISA) show that despite the healthy increase in benefit
payments, South African life insurers remained strongly capitalized.
South African life insurers injected R469 billion into the economy
last year through benefit payments to policyholders and
beneficiaries. Total benefit payments increased by an inflation
beating 10% from 2016.
The significance of the R469 billion in benefit payments for 2017
becomes evident when compared to the R528.4 billion in social grants
committed by Government over the next three years.
Of the total benefit payments to policyholders in 2017, more than
R60 billion was paid to individuals who had experienced either death
or disability in their family circle. This marks an increase of
almost R5 billion from 2016.
The life insurance industry held assets of R2.84 trillion at the end
of 2017, an increase of 6% from the R2.67 trillion held at the end
of 2016. (Thank goodness state capture was uncovered before certain
individuals could see these figures.)
Hennie de Villiers, deputy chair of the ASISA Life and Risk Board
Committee, reports that that industry assets exceed liabilities by
R231.1 billion, which is more than five-and-a-half times the legal
reserve buffer required. The legal reserve buffer, referred to as
the industry’s capital adequacy requirement (CAR), was R41.5 billion
at the end of December 2017.
De Villiers says this indicates that South African life insurers
remain well positioned to honour long-term promises to
policyholders. “This is critically important given that a
significant portion of the country’s long-term savings pool has been
entrusted to the life industry.”
Surrenders and lapses
Policyholders accessed R72.6 billion in benefits in 2017 by
surrendering their savings policies. De Villiers says while
surrenders are always of concern, it is encouraging that the life
industry reported a 9% decrease in surrenders from 2016. In 2016
life insurers had seen a very worrying 16% increase in surrenders
from 2015.
De Villiers says the fact that consumers are under financial
pressure was also evidenced by the high increase in the first-year
lapse rate for risk policies of 34%. In 2017, some 2.7 million
policies less than 12 months old were lapsed compared to 2 million
in 2016.
Risk protection shows strong growth
Last year’s economic woes impacted heavily on new premium income for
recurring and single premium business, which overall showed no
growth from 2016 to 2017.
De Villiers says it is encouraging, however, that more consumers
were prepared to commit monthly premiums to risk protection policies
and savings policies in 2017 when compared to 2016. As a result,
both achieved growth in policy numbers. Recurring premium risk
policies showed growth of 8% and recurring premium savings policy
business increased by 3%.
Retirement provision
De Villiers believes that the increase in the number of recurring
premium savings policies sold continues to be driven by consumer
demand for the tax-free savings and investment products. This may,
however, have contributed to the lower recurring premium retirement
annuity sales, which dropped by 17%.
All single premium business categories recorded a significant drop
in new policies sold.
In the 12 months to the end of December 2017 there was a decrease of
5% in the number of single premium living annuities sold and a 6%
drop in retirement annuities. Sales of compulsory annuities
decreased by 32%, largely driven by the introduction of the “de minimis rule”, which increased the level below which the proceeds of
a retirement annuity may be taken as a lump sum.
In terms of the “de minimis rule” retirement fund members may take
in full proceeds that fall below the threshold of R247 500. The
threshold increased from R75 000 in March 2016.
Impact of increased tax incentive
We asked ASISA about the drop in sales of RAs, to which they
responded:
“It is difficult to say exactly why RA sales dropped despite the
increase in tax deductibility, but the economic pressures on
consumers probably played a part. An RA is a long-term commitment,
which may have caused consumers to rather opt for savings vehicles
like a tax-free savings plans, where they can have access to their
funds if needed.”
Perhaps a re-focus from product houses and advisers on the benefits
of RAs, coupled with the post-retirement benefits of these
instruments will address the challenge? |
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10% more with Discovery Fixed Retirement Income Plan
The only thing better than a guaranteed or fixed income annuity is an
increase in the amount that a client can receive each month. Clients who
take out a Fixed Retirement Income Plan in the next week qualify to
receive 10% additional income for the first three years in retirement.
This is in addition to the annuity income amount and before tax. For
single-life annuities, the 10% additional income will stop after three
years or if the client dies. For joint-life annuities, the 10%
additional income will stop after three years or if both annuitants have
died.
Disclaimer
This article is meant only as information and should not be taken as
financial advice. For tailored financial advice, please contact your
financial adviser. Discovery Life Investment Services Pty (Ltd):
Registration number 2007/005969/07, branded as Discovery Invest, is an
authorised financial services provider. All life assurance products are
underwritten by Discovery Life Ltd. Registration number: 1966/003901/06.
An authorised financial service provider and registered credit provider,
NCA Reg No. NCRCP3555. |
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| Your Practice Made Perfect |
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Add Class of Business to your 2018 training calendar |
Why is Class of Business an important 2018 training option for everyone
and not only for learners who need to comply with the fit and proper
requirements for financial services providers?
Also add COB training to your training schedule if you:
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Wish to remain up to date
with class of business product information, in order to maintain
your on-going competence in terms of the fit-and-proper requirements.
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Wish to obtain CPD
hours in terms of the fit-and-proper requirements. (First CPD cycle
and CPD requirements come into effect on 1 June 2018).
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Wish to use class of
business training as part of your requirements towards the completion of
a full qualification.
Register
today! |
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Another reason to consider RAs in estate planning
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Further to our recent discussion on the increased use of retirement
annuities in estate planning, we provide a link below to a Moneyweb
discussion on how new legislation further tarnishes the attraction of
trusts as a tool to avoid estate duty.
Click here to read the Moneyweb article titled
Concern about practical
challenges with new trust legislation. |
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Extending the life of a Draw-Down Living Annuity
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Tony de Wijn of Softbyte Computers in Durban is a regular contributor of
very useful tax information, and often at no charge.
In line with recent discussions in this forum on retirement planning,
and the important role retirement annuities play, Tony discusses
innovative ways to get more income for a longer period from a Draw-Down
Living Annuity.
Click here to listen to the
7 minute video clip. |
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Conduct Standards Published for OTC Derivatives Providers
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On 15 March the Financial Services Board published a Conduct
Standard for the Criteria for Authorisation as an Over-The-Counter
Derivatives Provider.
The draft Regulations were initially published on 4 July 2014 and,
following extensive industry consultation, the draft Regulations and
draft Board Notices were published for third time for public comment
on 21 July 2016.
Comments received from various market participants and industry
stakeholders were considered by the Registrar of Securities
Services. The Conduct Standard and the responses to comments
submitted are published on the
FSB website.
Clarifications may be submitted via email to
michael.kabai@fsb.co.za
with the subject title FMA: Board Notices (Round 4). The deadline
for submission is 29 March 2018.
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Facts about SA fund managers
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Did you know that almost half of all fund managers obtained their
undergraduate degrees from UCT? Glacier Research recently conducted
a study with SA fund managers that provide a unique aggregate view
of the industry. Patrick Cairns recently unpacked the research and
reported on the
10 facts about SA fund managers you should know.
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Regulatory Examinations |
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Regulatory Exam Preparation Material
– Reminder |
The new Determination of Fit and Proper Requirements (BN 194 of
2017) come into effect on 1 April 2018.
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The new Fit and Proper requirements will form part of the
regulatory exam question data bank from 1 April 2018.
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This means that those who registered to write after 29 March
2018 will have to study the new Determination of Fit and Proper
requirements as it appears at this stage that the updated study
material may not be available by 1 April 2018.
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IMPORTANT: The standard cancelation clause will apply to all
registrations for the regulatory examinations. Candidates who
wish to re-schedule their examinations should take careful
cognisance of the FSB’s cancelation clause.
Contact details
Email enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants. |
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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The Moonstone website -
www.moonstone.co.za
- enjoys an average of 20 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 49000
dedicated financial decision makers who receive 2 newsletters per week. |
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
iInvestment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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Personal Lines
Sales/Underwriter:
Venshaw Insurance Administrators, Bellville, Western Cape - We are
looking for a candidate with 2 years' experience, RE5 and NQF4 (150
credits).
Read More
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Short Term Insurance
Representative: External Marketer/Service:
Venshaw Insurance Administrators, Bellville, Western Cape - The
candidate should be Xhosa speaking, and have completed RE5 and NQF4 (150
credits).
Read More
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Short Term Insurance
Representative: Claims Consultant:
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candidate should be Xhosa speaking, and have completed RE5 and NQF4 (150
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Broker Consultant:
CIA - Commercial & Industrial Acceptances Pty Ltd, Gauteng, East Rand
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Financial
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Senior Client Liaison
Officer:
Vunani Fund Managers (Pty)LTD - We are a fund management company
looking for a suitably qualified EE candidate.
Read More
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In Lighter Wyn |
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Saint Patrick's Day Gems |
A Tall Tale
An Irishman applying for a job as a treefeller was asked if he had any
experience felling trees.
Yes, in the Sahara forest.
You probably mean the Sahara desert?
O is that what they call it now?
Thanks, Danny Jacobs
Soft spoken
An Irishman applying for a job as a blacksmith was asked if he had
any experience shoeing horses.
He said no, but he had once told a donkey to f… off.
Clever thinking
O'Toole and his wife are in bed one night and they hear the
neighbour's dog is barking its head off in the garden. Somewhat
disturbed by the noise, O'Toole explodes, 'Botheration and that!'
and storms off downstairs.
He comes back upstairs five minutes later and his wife asks, 'What
did you do, O'Toole?'
O'Toole replies with a wide grin, 'I've put the dog in our garden so
I did, now let's see how they like it.'
Religious discrimination
Gallagher is in Boston and he is waiting patiently, also, he is
watching the traffic cop on a busy street crossing.
The cop stops the flow of traffic and shouts, 'Okay pedestrians'.
Then he allows the traffic to pass. He did this several times, and
Gallagher is still standing on the sidewalk.
After the cop has shouted 'Pedestrians' for the tenth time,
Gallagher approaches him and says, 'Is it not about time ye let the
Catholics across?'
Duck you sucker
On the bus Paddy got chatting to Murphy who was carrying a bag on
his back.
'What's in the bag?' asked Paddy.
'I'm not going to tell', replied Murphy.
'Go on, do.' pleaded Paddy.
'Ah, all right then, it's ducks.' announced Murphy.
'If I guess how many ducks you have in the bag, will you give me one
of them?' enquired Paddy.
'Look', said Murphy, 'If you guess the correct number, I'll give you
both of them.'
'Five!' said Paddy triumphantly.
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
Disclaimer:
Services and products advertised by external product suppliers in
this newsletter are paid for by the respective suppliers. Moonstone
does not endorse any opinions, conclusions, data, products, services
or other information contained in this e-mail which is unrelated to
the official business of Moonstone and furthermore accepts no
liability in respect of the unauthorised use of its e-mail facility
or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here. |
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©2015 Moonstone. All rights reserved. |
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