Executive Summary: Short Term (Non-Life) Insurance Report for Quarter ended 30 September 2017
By Insurance24
HARARE, The non-life industry continued to experience environmental as well as other sector-specific challenges. Underlined by the bull-run on the stock market and product innovations, however, the sector showed signs of resilience and above-inflation growth rates in both premium income and balance sheet sizes.
Non-life insurers reported total gross premium written (GPW) amounting to $169.79 million for the nine months ended 30 September 2017 compared to $155.31 million reported during the same period in 2016 resulting in a 9.32% increase.
Insurance brokers placed $72.34 million or 42.6% of total gross premiums for non-life insurers for the nine months ended 30 September 2017.This was a 2.76% increase from the $70.46 million written for the nine months ended 30 September 2016.
Partially indicating slight improvements in risk retention by direct insurers, business written by reinsurers decreased by 2.20% from $81.52 million written for the nine months ended 30 September 2016 to $79.73 million for the current reporting period.
Reinsurance brokers contributed 73.28% of the reinsurer’s total gross premiums, writing $58.43 million premiums. Out of the twenty operational insurers, five insurers and one reinsurer reported capital positions which were non-compliant with Statutory instrument 95 of 2017 with regards to the regulatory minimum capital requirements of $2.5 million and $5 million for the period under review.
The asset base for the insurance industry increased from $188.01 million for the nine months ended 30 September 2016 to $235.35 million for the comparative period in 2017.
The industry average prescribed assets ratios for non-life insurers and reinsurers were 11.21% and 11.01% respectively for the period 30 September 2017, compared to the minimum requirement of 5%, demonstrating full compliance with the minimum regulatory requirements on average.
The retention ratio, an indication of risk appetite, for insurers averaged 61.32% as at 30 September 2017, increasing from the 59.36% average for the comparative period in 2016. Reinsurers reported a decrease in the retention ratio from 65.08% to 62.26% reported for the nine months ended 30 September 2016 and 30 September 2017 respectively.
For the nine months ended 30 September 2017, the profit after tax for non-life insurers was $35.89 million, a 264.29% increase from $9.85 million reported for the comparative period in 2016.
On the other hand, non-life reinsurers reported a profit after tax of $11.51 million compared to $5.53 million for the same period in 2016.
