Short-term insurance has an excellent business model. Not only does it make a profit on the difference between what it takes in from contributions and pays out in claims - the underwriting margin - but it also makes money on what is called the free float. This is cash that is going to be paid out in claims, but is not for at least 30 days. It also usually makes money on its long-term investment portfolio - which historically has been primarily in equities.

In a poor investment year such as 2008, there can be a net loss as Mutual & Federal (M&F) showed on the income statement, with a loss of R146m compared with an R850m gain in 2007.

Santam reduced its equity exposure by R500m in June 2008 and a further R500m in September. It, nonetheless, still suffered a knock of R721m in its portfolio.

But with higher interest rates, the free float had proved to be money for jam.

The two companies and Zurich - the three listed underwriters - control almost half the market. The three businesses are all focused on the broker market and all have indicated that they do not plan to enter the direct personal lines market - at least not under their own brands.

In life insurance - where direct sales are negligible - only the niched 1LifeDirect and Clientele have successful direct arms.

But in short-term, direct has played a serious role in the consumer market since 1985 when Douw Steyn started Auto & General. His group, now known as Telesure, operates in the direct market primarily through the Dial Direct brand.

It has also set up an insurance aggregator, Hippo.co.za, allowing clients to shop around for quotes from different companies at a single website. So far, however, the quotes are primarily from Telesure businesses, with some Hollard quotes as well (Hollard happens to be a shareholder in the group).

Outsurance, within the FirstRand group, is now the market leader in direct and its Outbonus (return of premiums after five years) has become a brand in its own right. Outsurance's underwriting margins are enviably high, dwarfing Santam's (excellent for its business mix) 6,4%. But Outsurance has not broken significantly into the larger commercial or corporate business - about 70% of its business is made up by the motor book.

M&F considered direct as part of the Project Spice initiative of the Old Mutual group, but it was abandoned once Mutual launched its (later aborted) attempt to sell M&F.

Zurich has never deviated from a broker-only model - it has the strongest reputation for honouring claims on time, but it is by no means a high-growth business.

Santam is a 25% shareholder (with Sanlam at 55% and PSG at 20%) in MiWay, which is intended to be a broad financial services direct channel. With Outsurance and Dial Direct already being strong brands in the market, it was quite brave to launch another competitor in the space. But Sanlam is taking a long-term view. It improved the odds of success by appointing Rene Otto, the founding MD of Outsurance, to run MiWay. It launched in February 2008 and is at least a year away from breaking even. But Santam CEO Ian Kirk (who has no operational involvement) says few clients have moved from Santam to MiWay and he is confident that cannibalisation will be limited.

Over the years, many names such as Commercial Union, General Accident, Guardian National and FedGen have disappeared.

The maverick Hollard group now includes Paolo Cavalieri's Etana, which inherited the commercial side of the FedGen business. Hollard is about the same size as Zurich, but it is considered to be a lot more innovative than the stodgy listed groups.

It distributes through unusual channels such as the Kaizer Chiefs supporters club and it is the only major player with a hybrid broker/direct model.

But as a private company, there is limited disclosure from Hollard - as there is from Telesure. Both, however, look like well-managed, high-growth businesses, while on the listed sector only Santam could conceivably earn the tag of dynamic.