Since the last quarter we have made two major changes to the data in thisreport

Since the last quarter, we have made two major changes to the data in thisreport. First, we have - to the greatest extent possible - incorporated hardfigures that have been made available by the regulator(s) and tradeassociation(s) in each country. In some cases, therefore, we have begun toinclude numbers that pertain to the development of the insurance sector throughthe early stages of the global financial crisis Second, we have extended ourforecasts out to 2013. In all cases, we have reviewed the key growth drivers -non-life penetration and life density - which we had incorporated in ourforecasts. The global financial crisis is likely to affect the various segmentsof the global insurance industry in different ways. In many countries,especially in Europe, the coming recession points to softness in the non-lifesegment.

In many cases, numbers of policies may fall and there should bedownwards pressure on premiums. By contrast, the main problem for the lifesegment in almost every country is the extreme volatility of financial markets. Over the longer term however, the fortunes of life insurance will likely recoverthanks to the secular growth of organised savings in most countries. China -where the larger insurance companies continue to achieve double-digit growth inpremium income - is a good example of this.

Some particular niches should alsodo well in the current environment, such as legal liability insurance Insub-Saharan Africa, we profile 19 companies. These are AIG, AGF, Allianz,Cardif, Global Alliance, Guardrisk, HDI-Gerling, Hollard, Liberty Group,Metropolitan, Momentum Group, Munich Re, Mutual & Federal, Nedgroup, Old Mutual,OUTsurance, Sanlam, Santam, and Zurich South Africa. We also look at the particular features of South Africa's insurance market thatset it apart from others that we survey. We estimate that, over the course of2008, total premiums in South Africa rose by 13% to ZAR259,087mn. Non-lifepremiums rose by 15% to ZAR61,612mn while life premiums rose by 13% toZAR197,475mn. Between now and the end of the forecast period, we expect thatannual non-life premiums will grow by ZAR68,569mn, while annual life premiumsshould grow by ZAR45,545mn.