Insurance industry premiums up 12pc

HARARE - Zimbabwe's insurance industry wrote $244 million in net premiums in the quarter to September 2015, representing a 12 percent growth from $223 million realised in the comparable period last year.

Figures released by the Insurance and Pension Commission (Ipec) on Friday revealed that total expenditure from 11 Life companies and two reassurance
companies was $174 million compared to $167 million registered in 2014.

“This resulted in a $69 million technical profit up from $52 million in the prior period,” Ipec said adding that the expense and combined ratios were reportedly 24 percent and 71 percent, respectively.

The insurance industry’s total assets in the period under review declined by five percent from $1,641 billion last year to $1,557 billion as at September 30, 2015.

“This is an indication of negative investment returns by major asset classes like equities and properties as a result of depressed market imperatives or conditions,” read part of the report.

In the three months to September, major risks affecting life companies included compliance in relation to capitalisation, prescribed assets ratio, liquidity risks, bank balances trapped in failed banks among others.

According to Ipec, for the period under review the three biggest players controlled $190 million or 84 percent in net premium written from $177 million registered in the comparable period.

“We continue to implore the industry to engage in non-price competition strategies that respond to current socio-economic fundamentals particularly product innovation responding to the informal sector needs and income patterns,” the insurance commission said.

For the cumulative period to September 30, 2015, gross premium written grew by 12 percent from $215 million to $242 million.

The gross premium written was further broken down into recurring business, $174 million or 72 percent and $68 million or 28 percent being new business.

Ipec noted that employee benefits business was $96 million or 60 percent of gross premiums while $160 million or 40 percent was individual life assurance.

“Negative growth rate was evident on corporate business — employee benefits — as a result of the challenging business conditions,” Ipec said.

By the end of September, all life companies, except Altfin, were adequately capitalised to at least $2 million as prescribed by Statutory Instrument 21 of 2013.

“The Commission is working with Altfin as to the next course of action in line with the Insurance Act,” Ipec added.

Meanwhile, net premium written by the two reinsurers declined from $7,247 million in the comparable period last year to the current $6,995 million.

The insurance commission said reinsurers should continue striving to be product innovation champions for our industry given the international nature of their business.

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