PHILLIMON MHLANGA
Zimbabwe’s short-term insurers’ gross premium written (GPW) grew 24,69 percent to $75,31 million in the quarter to March this year compared to $68,22 million reported in the comparative period last year due to better performance in the motor and fire insurance segments.
According to the Insurance and Pension Commission (IPEC)’s latest report released this week, the two classes accounted for about 64 percent of the total industry’s GPW, meaning motor and fire segments contributed nearly $50 million.
“Motor and fire insurance remained as major sources of business as the two classes accounted for $48,29 million of the total GPW of $75,31, which translates to 64,12 percent of total GPW for the quarter under review,” IPEC said.
The non-life insurance companies’ investments in prescribed assets increased during the reviewed period by 10,81 percent to $23,48 million from $21,19 million reported in the same period the previous year.
The increase was a result IPEC’s directive which compelled the insurance companies to comply with the minimum prescribed asset ratio, which is five percent.
IPEC, however, expressed concern over non-compliance to prescribed asset regulation. The regulator disclosed that 10 insurers were not compliant with the prescribed asset regulation.
“Ten insurers were not compliant with the minimum prescribed asset ratio. The insurers risk being penalised as non-compliance with prescribed asset is a serious regulatory concern,” IPEC said.
The non-life insurance industry has 615 registered entities. Out of these, there are 20 insurance companies, two micro insurers, eight reinsurance companies, two underwriting management agencies, 31 insurance brokers, seven reinsurance brokers, 31 loss assessors, 115 corporate agents and 399 sole agents.
The report indicated that three out of 20 insurance companies were not compliant with the minimum capital requirement of $2,5 million.
These are Allied Insurance Company whose capital stood at $2 million, Clarion Insurance Company ($2,3 million) and Sanctuary Insurance Company ($1,8 million).
The industry’s total assets grew by 10 percent to $258,43 million during the period under review from $235, 42 million reported in the same period last year.
The growth in total assets was mainly due to increase in premium debtors and technical assets which totaled $1 million, according to IPEC.
But, IPEC is concerned with the increasing premium debtors. The regulator called for “robust credit risk management systems” in the industry.
“The Commission notes with concern the fact that premium debtors were the largest asset class accounting for 21,24 percent of total assets. Although, generally, the level of premium debtors normally declines as the calendar year progresses, the prevalence of premium debtors call for robust credit risk management systems by insurers,” IPEC said.
