South Africa's life insurance industry experienced 14% drop in new individual business for first half of this year. Figures that were recently released, show that from January to the end of June 2009, the industry attracted new individual premium income of R27.7-billion, compared to R32.4-billion in the second half of last year.

Peter Dempsey, deputy CEO of the Association for Savings and Investment South Africa (ASISA), said that the slowdown in new business did not come as a surprise. "Given the magnitude of bad news that consumers have had to absorb over the past 12 months, we are surprised that the slowdown did not prove more intense."

"Until the end of last year the industry was still seeing a growth in new business. But when the outlook for global financial markets and the local economy had not improved by early this year, consumers put on the brakes."

According to Dempsey, the local life industry remains in good health: "At the end of June this year excess industry assets were more than three times the legal reserve buffer required. This is good news for policyholders as it means that life companies remain well positioned to honour benefit payments due to clients."