HARARE, April 22 (The Source) – Zimbabwe’s short-term insurers have registered a 15 percent decline in earnings to $12 million for the full year to December 2014 on rising operating costs and lower gross premiums written, a regulator’s report has shown.
“The volumes of profit recorded by non-life insurers decreased by 14.74 percent from $12,02 million for the year ended 31 December 2013 to $10,25 million for the year ended 31 December 2014. The decrease in the volume of profit was mainly attributable to an upsurge in operating expenses coupled with an increase in net incurred commission,” the Insurance and Pension Commission (IPEC) said in the fourth quarter report on non-life insurers.
None of the direct non-life insurers were compliant with the minimum prescribed assets ratio as at December 31.
“Operating expenses increased by 10.40 percent from $47,99 million for the year ended 31 December 2013 to $52,99 million for the year under review,” IPEC said.
“On the other hand, net incurred commission amounted to $8,12 million for the year ended 31 December 2014, reflecting a whopping 67.74 percent increase from $4,84 million reported for the year ended 31 December 2013.”
The non-life insurance industry witnessed depressed growth of 3. 48 percent in Gross Premium Written (GPW) from $207,69 million during the year under review on the back of a weakening economy.
“The depressed growth in t he volume of business is in tandem with the slowdown in the growth in Gross Domestic Product (GDP) at market prices from 8.86 percent for the year ended 31 December 2013 t o 3.9 percent for t he y ear under review. This is explained by the fact that, generally the insurance sector follows the fortunes of the economy,” IPEC said.
“The contribution of the non-life insurance industry to the country’s GDP remained largely unchanged as evidenced by the marginal decrease in the penetration ratio from 1.54 percent for the year ended 31 December 2013 to 1.53 percent for the year ended 31 December 2014. On the other hand, the average per capita spending on non-life insurance (non-life insurance density) decreased from $14,46 for the year ended 31 December 2013 to $13,60 for the year ended 31 December 2014.”