Executive summary…Funeral Assurers report..Half year 2018 to June 30
HARARE, There were 9 registered and operating funeral assurance companies as at 30 June 2018, the same number recorded as at 31 March 2018.
All registered life assurers also wrote funeral assurance business for the half year which ended on 30 June 2018. The details of this business is in the life assurance industry report.
Gross written premium for the industry for the half year ended 30 June 2018 amounted to $20.97 million, an increase of 6.45% from $19.70 million reported for the comparable period in 2017.
Uptake of reinsurance remains very low for funeral assurance industry with a retention ratio of 99.96%. There seems to be no other risk transfer mechanisms being utilized by funeral assurers to manage risk.
The asset base of the funeral assurance industry stood at $71.62 million as at 30 June 2018 representing a decrease of 3.35% from $74.10 million reported as at 31 March 2018.
As at 30 June 2018 the funeral assurance industry reported investments in prescribed asset ratio of $1.46 million which represents a 7.19% percent decrease from $1.57 million reported as at 31 March 2018.
This translates to a prescribed asset ratio of 2.04%, which is significantly below the required minimum prescribed asset ratio of 7.5%.
The Commission will take necessary measures to ensure that funeral assurance industry players are compliant with the minimum prescribed asset ratio.
As at 30 June 2018, 6 out of 9 players in the funeral assurance industry were undercapitalized. The Commission will engage these players so that they regularize their capital positions and comply with the provisions of the law for the protection of policyholders interests.
For the half year ended 30 June 2018 the funeral assurance industry reported net profit after tax of $2.86 million representing 2.47% increase from $2.79 million reported for the comparable period in 2017.
Total claims incurred for the half year to 30 June 2018 amounted to $5.83 million, an increase of 15.82% from $5.03 million reported for the same period in 2017.
The outlook for the funeral assurance industry continues to be positive. Players should embrace new technology in the areas of product distribution and internal processes as a way of cutting costs and modernizing their business processes.
