Old Mutual highest capitalised insurer: Report

HARARE - Newly-rebranded Old Mutual Insurance (OMI) is the most liquid short-term insurer in Zimbabwe, with $13,5 million by end of June 2014, ahead of the $1,5 million minimum capital requirement.

A report released this week by the Insurance and Pensions Commission (Ipec) revealed that OMl — formerly RM Insurance Company — was followed by Grace Muradzikwa’s NicozDiamond Insurance Company (Nicoz Diamond)  and thirdly Alliance Insurance with capital positions of $10,2 and $4,5 million respectively.

Excellence Insurance Company was the least with a capital position of $437 000.

Ipec said total cash and near cash assets for non-life insurers decreased by 8,10 percent from $45,94 million as at March 31, 2014 to $42,20 million as at June 30, 2014.

“The decrease in cash and near cash assets could be in line with the general liquidity problems currently being faced by the economy at large,” it said.

Ipec said liquid assets for the non-life insurers remained concentrated in three insurers namely OMl, Alliance and Nicoz Diamond.

The three contributed 63,25 percent of total cash and cash equivalents.

The insurance industry regulator noted that notwithstanding the decrease in the amount of liquid assets at the disposal of non-life insurers, other indicators of liquidity highlighted that there was a marginal improvement in the liquidity of the non-life industry as a whole.

Total working capital increased by 3,38 percent from $26,63 million as at March 31, 2014 to $27,53 million as at June 30, 2014. On the other hand, the industry average current ratio and the acid test ratio improved from 125,34 percent and 44,58 percent as at March 31, 2014 to 129,52 percent and 46,02 percent respectively as at June 30, 2014.

Industry experts say this shows that on average there were more liquid assets for every dollar worth of current liabilities as at June 30, 2014 compared to end of March 2014.

 

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