HARARE, September 7 (The Source) – Zimbabwe’s short-term insurers enjoyed profit growth in the first quarter of the year, aided by a decrease in uptake of reinsurance, the latest report by the industry regulator shows.
Total profit after tax for non-life insurers increased by 9,07 percent from $3,59 million for the quarter ended March 31 last year to $3,92 million this year.
“The increase in profit after tax was mainly attributable to a decrease in the uptake of reinsurance which amounted to $2,31 million coupled with a decrease in net incurred claims and improved investment returns, which amounted to $0,51 million and $0,36 million,” the Insurance and Pensions Commission (Ipec) said in the 2015 first quarter report released last Friday.
The total profit after tax reported by non-life insurers translated into a return on assets and return on equity of 2,16 percent and 5,05 percent respectively.
Ipec noted that although the total profit for the industry improved, four insurers – Allied, Champions, Cell Insurance and Credsure – reported losses during the quarter under review.
“The number of insurers who reported losses compare favourably with a total of nine reported for the comparative period in 2014. There were no significant changes in the profitability of the non-life insurers’ core business with underwriting profits decreasing marginally from $3,76 million for the quarter ended March 31,2014 to $3,60 million for the quarter under review,” Ipec said.
A comparison of the underwriting profits for the quarter under review ($3,60 million) with total profit after tax for the same period ($3,92 million) indicates that non-life insurers generated the bulk of their profits from underwriting.
Ipec noted that the volume of business written by non-life insurance companies remained largely unchanged with a negligible decrease of 0,45 percent in total Gross Premium Written (GPW) from $71,21 million last year to $70,89 million this year.
“The dampened growth in the business written by insurers is attributable to the economic hardships that were being experienced during the quarter under review,” Ipec said.