Browsing by Author "Veerasamy, Ugeshnee."

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Examining factors affecting lapse rates in the South African short term insurance industry.
(2019) Veerasamy, Ugeshnee.; Chasomeris, Mihalis Georgiou.
The Insurance industry is one of the main contributors to the South African economy. The threats resulting from insurance lapse within the South African short term insurance industry are of great economic importance as lapse negatively influences the role player’s financial state. The aim of this research is to examine factors affecting lapse rates in the South African short term insurance industry. A quantitative research methodology was applied for this investigation. The policy data obtained spans from 2012 to 2018. The policyholder and policy characteristics that were examined in this study are age, gender, province, policy start date, policy end date, policy duration, policy premium, sum insured, product type, bank, LSM (living standards measure) Level, cluster group, salary band, government employee status and registered deed status. While the macroeconomic variables examined where inflation rates, interest rates and GDP growth rate. Data gathered was analysed using descriptive and inferential statistics. The key questions that this research sought to answer included the following: (1) What policyholder features determine short term insurance lapse? (2) What macroeconomic variables influence short term insurance lapse? (3) How do short-term insurers manage lapse? Product type, gender, cluster group, policy duration and sum insured where found to have statistically significant influence on lapse rates. While the macroeconomic variables examined in this study were found to exhibit a weak significant correlation with short term insurance lapse rates. Recommended strategies to mitigate lapse rate included approaches to retain customers and strategies that could be applied during the development phase of short term insurance policies.