Well, it’s a science. To put it simply, insurance premiums are calculated by assessing trends in risk: the policy-holder’s risk profile, the probability of claims, and their associated costs.

So the policy-holder’s specific insurance use forms the basis for the calculation, together with a host of other influential factors like:

  • The exchange rate
  • Increases in labour costs
  • The ever-increasing complexity of repairing technology-based items
  • The availability of parts
  • Weather patterns due to climate change
  • Crime trends
  • The cost of reinsurance*
  • The cost and success rate of 3rd party recoveries
  • The low numbers of insured people in South Africa (only a third of vehicles are comprehensively insured)
  • The claims history of every insured person

* Reinsurance is insurance for insurers, so that even if a catastrophic event affects South Africa and causes a massive rise in claims, insurers will still be able to pay out.

But why do other people’s claims matter? Well, every month, thousands of policy-holders contribute toward an insurance pool and those funds are used to pay claims. Premium increases are essential to ensure that the pool can continue to pay out claims in future.

Insurance providers tend to take a stance in their philosophies, around comprehensive cover vs peril-based cover. IntegriSure’s stance is in favour of comprehensive cover, because we believe that you should have the peace of mind of knowing you’re covered for all eventualities, while enjoying more favourable rates.

When a policy-holder has a large broker like IntegriSure in their corner, the broker is able to utilise critical mass to get better rates and lower increases for clients. These clients’ specific insurance use is the basis for an increase calculation, together with all the above variables, and the full picture is taken into account to ensure the most cost-efficient possible outcome.

Any expert worth their salt will advise clients to keep the value of their assets updated, of which a key example is seasonal inventory updates. They’ll also remind the policy-holder that the weakening rand may mean that the value of imported goods has increased over time. It’s a good idea to make a note, every season, to double-check the value of your household contents, buildings, and portable possessions.

When you’re an IntegriSure client, you benefit from decades of experience coupled with selective pooling and advice-driven cover, and you always have an expert in your corner.