Risk Series: Understanding South Africa’s Risk Landscape in 2025

As part of our Risk Series, Econorisk is committed to delivering educational and insightful content that helps clients, brokers, and industry peers navigate the evolving world of short-term insurance. The Risk Series covers everything from evolving trends in the risk landscape to rising premiums, claims trends and challenges, and insurance-specific product solutions, such as cyber insurance, marine cover, and professional indemnity. In this article, we explore the risk landscape in South Africa as we move into the second half of 2025, unpacking key factors shaping the short-term insurance industry and the importance of expert insurance advice in navigating this dynamic space.

A Shifting Risk Landscape

Over the last five years, a range of significant events have tested the South African insurance market. From the economic fallout of COVID-19, to the devastating KwaZulu-Natal riots in 2021, and the catastrophic KZN storms and floods, our country has experienced heightened periods of uncertainty. These events led to increased claims activity and a tightening of underwriting criteria across the market.

“One of the more consistent and disruptive risk factors over the past decade has been loadshedding”, says Matthew van den Heuvel, Joint CEO at Econorisk. Power instability affects everything from home safety and security to business continuity and road safety. Interestingly, the suspension of loadshedding for much of 2024 brought significant relief and contributed to a noticeable reduction in fire-related claims. This is a powerful reminder of how external factors influence risk exposure and claims trends.

Cyber Risk: A Growing Threat

Cybersecurity has emerged as a top concern for both individuals and businesses. According to the Allianz Risk Barometer 2025, cyber threats such as ransomware attacks, data breaches and IT outages is the top global risk in 2025. “South Africa is increasingly targeted by cybercriminals, and yet cyber insurance remains largely underpenetrated. As ransomware attacks, data breaches, and digital fraud continue to escalate, the need for comprehensive cyber cover has never been more critical”, says Andrew Lilley, Joint CEO. It’s a product line that requires specialist understanding, proactive risk mitigation, and access to tailored solutions. Learn more here.

Looking Ahead: What to Expect

In addition to digital threats, insurers and reinsurers continue to monitor global economic conditions, the rising severity and frequency of extreme weather events, and political instability that may affect the reinsurance market. The result is ongoing fluctuations in capacity and pricing, which impact the availability and affordability of certain types of cover.

On a more positive note, there’s been a recent shift in market sentiment. “After a period of hard market conditions, we’re beginning to see signs of softening, with some insurers easing their underwriting criteria”, says Matthew. This could offer greater opportunity and choice for policyholders in 2025.

In our latest Risk Series video, we delve deeper into the topic and explore key trends shaping the short-term insurance industry in 2025. Watch it here: