HIGHLIGHTS: Short-term insurance sector for the nine months ended 30 September 2020
Staff Writer
HARARE, Total Gross Premium Written (GPW) by short-term insurers for the Zimbabwe dollar denominated business amounted to ZWL4.63 billion, reflecting an increase of 634.94% from ZWL629.97 million reported for the comparative period in 2019.
The total business written by reinsurers increased by 599.23% from ZWL294.32 million reported as at 30 September 2019 to ZWL2.06 billion for the comparative period in 2020.
During the nine months ended 30 September 2020, premium income by insurance brokers increased by 785% in nominal terms from ZWL268.68 million in 2019 to ZWL2.377 billion. Net brokerage commission for the nine months ended September 2020 amounted to ZWL341.99 million. Reinsurance brokers reported ZWL1.401 billion in gross premium for the nine months ended September 2020 as compared with ZWL181.78 million reported for the same period in 2019 reflecting a 671% increase.
The average commission ratio for reinsurance brokers declined by 11 percentage points from 19% recorded for the nine months ended 30 September 2019 to 8% for the comparative period in 2020.
Only three (3) short term insurance players submitted foreign currency denominated returns for the period ended 30 September 2020. The three players wrote Gross Premiums amounting to US$13.32 million. The rest of the industry players did not respond to the Commission`s repeated call for the filling of returns relating to foreign currency denominated business in terms of Circular 15 of 2020.
Five (5) short term reinsurers submitted foreign currency denominated returns for the period ended 30 September 2020. The Gross Premium written by these players amounted to US$33.81 million.
In terms of foreign currency denominated business, only five (5) out of the thirty-two (32) brokers completed returns in line with Circular 15 of 2020. The premium income generated by the entities amounted to US$6.78 million with total commission of US$1.07 million.
All the eighteen (18) short-term insurers were compliant with the minimum capital requirement of ZWL37.5 million as at 30 September 2020. The reported capital positions were computed without accounting for non-admissible assets as stipulated in Statutory Instrument 95 of 2017. All short-term reinsurers reported capital positions which were above the minimum capital requirement of ZWL75 million as at 30 September 2020.
All the registered short-term reinsurers reported capital positions above the prescribed minimum capital requirement of ZWL75 million. As at 30 September 2020, five (5) insurance brokers reported capital positions that were below the required minimum of ZWL1.5 million. One (1) out of the seven registered reinsurance brokers reported capital position below the minimum capital requirement of ZWL1.5 million.
Total assets for short-term insurers increased from ZWL5.56 billion reported as at 30 June 2020 to ZWL6.76 billion as at 30 September 2020. Total assets for short-term reinsurers increased from ZWL3.69 billion reported as at 30 June 2020 to ZWL6.06 billion as at 30 September 2020.
Average compliance in prescribed assets increased from 2.24% to 4.90% for short-term insurers and decreased from 18.13% to 16.70% for reinsurers, as at 30 June 2020 and 30 September 2020 respectively. Only one (1) short-term insurance player was compliant with the minimum prescribed asset ratio of 10% as at 30 September 2020 and no reinsurer was compliant with the minimum prescribed asset ratio of 10% as at the same date.
Total assets for the insurance brokers increased significantly from ZWL114.1 million as at 30 September 2019 to ZWL957.23 million as at 30 September 2020. Reinsurance brokers reported total assets amounting to ZWL735.09 million as at 30 September 2020 which was an increase from the ZWL277.23 million reported during the same period in 2019.
