Life assurance GPW up 34pct, rising costs a worry

Life assurance GPW up 34pct, rising costs a worry

HARARE, April 7 (The Source) – Zimbabwe’s life assurance companies registered a 34 percent growth in gross premium business written to $261, 8 million last year, buoyed by employee benefits schemes, but increasing costs remain a worry for the industry, a regulator’s report showed on Monday.

The top three companies — Old Mutual, First Mutual Life (FML) and Zimnat — had 83 percent or $213 million of the $264 million net business, compared to the 88 percent or $168 million the year before.

About 92 percent or $250 million came from recurring business with the remainder being new business.  Employee benefits products contributed 73 percent of the premiums.

Net claims rose to $125 million compared to $88 million in the prior year, registering a 40 percent growth, underlining the need for the industry to proactively deploy prudent underwriting measures, the report said.

Outstanding claims grew by 14 percent to $2,4million.

“The life industry was largely adequately capitalized statutorily although attaining a perfect asset- liability balance remains a challenge,” the Insurance and Pension Commission said in its life assurers report for 2013.

Total industry assets grew by 31 percent to $1,6 billion.

Out of a minimum level of 7,5 percent, the industry’s uptake of prescribed paper was one percent.

“Players are however required to participate as availability improves to avoid statutory penalties,” IPEC said.

The report is based on 10 direct players and two reassurance companies.