Short-term insurers report 3pct HY increase in GPW

Short-term insurers report 3pct HY increase in GPW

HARARE, October 21 (The Source) – Zimbabwe’s short term insurers reported nearly three percent increase to $120,3 million in Gross Premiums Written (GPW) in the six months to June on the back of growth in demand for accident insurance and bonds, the Insurance and Pensions Commission’s latest quarterly report has shown.

Business written under accident insurance rose by 70 percent while business written in bonds insurance increased by 16,60 percent.

“The growth of 2,92 percent in the volume of business during the half year period under review compares favourably with negative 0,79 percent reported in the comparative period in 2014,” said IPEC in the report for the second quarter released on Tuesday.

Although the volume of business generated from motor and fire insurance decreased by 1,53 percent and 0,48 percent to $48,9 million and $25,7 million respectively, the two business classes remained the largest sources of business in terms of GPW.

The two business classes accounted for a total of 62,14 percent of total GPW, reflecting a marginal decrease from 64,67 percent reported for the comparative period in 2014.

In the period under review, a total of four registered insurance companies and one reinsurer were not compliant with the regulatory minimum capital requirement of $1,5 million.

IPEC also said total assets for the non-life insurance sector decreased from $364,46 million as at March 31, 2015 to $348,07 million by end of June this year owing to a decrease in premium debtors.

“Of all the underwriters, only four reinsurance companies were compliant with the minimum prescribed asset ratio of five percent as at June 30, 2015,” said IPEC.

“Total profit after tax for non-life insurers amounted to $5,23 million for the half year ended June 2015, reflecting a 12,05 percent decrease from $5,95 million reported for the comparative period in 2014.”

The decrease in total profit after tax was mainly attributable to an upsurge in net incurred claims coupled with increasing operational costs.

On the other hand, total profit after tax for non-life reinsurers increased from $720,000 for the half year ended June 30, 2014 to $3,40 million for the period under review on the back of increased volumes coupled with decreases in net claims incurred.