Funeral Assurance Industry registers $2.5 mln profit in Q1 2017

Funeral Assurance Industry registers $2.5 mln profit in Q1 2017
Insurance24 Reporter

HARARE, Gross Premium Written (GWP) for the Funeral Assurance Industry during the first quarter of 2017 grew 98.% to $39.81mln from same period comparable in 2016 at $36.26 million.

The Insurance and Pension Commission (IPEC) Commissioner Tendai Karonga in a presentation at the Zimbabwe Association of Funeral Assurers (ZAFA) conference in Bulawayo said 75.58% of the gross premium written which is $30.09 million was generated by life offices.

Consequently, the industry was profitable during the period with after tax profit increasing 56% to $2.54 million compared to $1.63 million same quarter in 2016 largely due to the decrease in claims as well as Commission.

Total assets for the industry increased by 15% to $60.82 mln from $53.04 million for the quarter 2016 largely attributed to increase in investments in funeral service provision infrastructure.

There are 9 funeral assurers and 11 life offices authorized to conduct funeral assurance business. According to the Commissioner, the Funeral Assurance industry continues to grow despite the general economic challenges facing the country.

He said the growing is owing to the fact that giving our beloved ones a decent sent off has sort of become a “basic necessity”.

However, the changeover from Zimdollar to US$ has brought challenges to the sector with respect to paid up policies and insurers shunning term funeral assurance policies.

Karonga said owing to challenges experienced in respect of paid up policies, Insurers have shunned away from term assurance policies opting for whole life assurance policies and this has led to complaints by some who feel aggrieved.

“Against this background, the Commission urges funeral assurance companies to come up with products which are flexible to suit the needs and circumstances of policyholders,” he said.

Karonga also said current economic challenges have led to an increase in lapse ratios as well as non taken up policies as policyholders fail to raise money to pay premium due to economic hardships.