Insurance and pension industry asset base at $4.4 billion as at March 2017: Chinamasa
Insurance24 reporter
Harare-The asset base for the insurance and pension industry totaled $4.4 billion as at 31 March 2017 with pension funds accounting for $2.28 bln of the total.
According to Finance Minister Patrick Chinamasa’s Annual Budget Review presented this afternoon, Non-life insurers asset base amounts to $221 378 000, while short-term Reinsurers have a total $137 288 000.
Below is the insurance section as enshrined in the Budget Review Statement
Insurance Industry Assets
| Insurer | Assets (US$) |
| Non-Life | 221 378 000 |
| Life | 1 658 817 000 |
| Funeral | 61 799 000 |
| Life Reinsurance | 36 578 000 |
| Short term Reinsurance | 137 288 000 |
| Pension Funds | 2 284 140 000 |
| Total | 4 400 000 000 |
Source: Insurance and Pensions Commission (IPEC)
Insurance Premiums
Gross premiums in life insurance business grew by 3.2% to US$581.2 million as at December 2016.
Insurance Companies’ Premium Receipts
| Insurer | Gross Premiums
(US$ m) |
Growth
(%) |
|
| 2015 | 2016 | ||
| Non-life Insurance | 213.44 | 215.97 | 1.19 |
| Life Assurers | 313.04 | 326.64 | 4.34 |
| Funeral Assurers | 36.54 | 38.62 | 5.69 |
| Total | 563.02 | 581.23 | 3.23 |
Source: IPEC
The bulk of this growth was driven by life assurers, whose premiums went up by US$13.6 million, whereas non-life insurance and funeral assurers’ premiums grew by US$2.5 million and US$2.1 million, respectively.
Re-Insurance Premiums
Gross premiums underwritten by re-insurance companies declined by 5% in 2016.
Re-Insurance Companies’ Premium Receipts
| Re-Insurer | Gross Premiums
(US$ m) |
Growth
(%) |
|
| 2015 | 2016 | ||
| Non-life Re-Insurance | 102.7 | 100 | -2.7 |
| Life Re-Assurance | 8.8 | 5.9 | -32.4 |
| Total | 111.5 | 105.9 | -5 |
Source: Insurance and Pensions Commission (IPEC)
Overall, the insurance industry registered a steady average growth of 2% in 2016.
Minimum Capital Requirements
Insurance companies’ minimum capital requirements were reviewed from January 2016, however, companies below the prescribed thresholds were allowed up to 31 December 2016 to meet the revised minimum capital requirements.
The Table below shows the level of minimum capital compliance requirementsfor different classes of business:
Capital Requirements: December 2016
| Insurer | Previous
Capital Threshold
|
Capital
Threshold effective January 2016 |
| Non-life Insurance | US$1.5 m | US$2.5 m |
| Non-life Re-Insurance | US$1.5 m | US$5 m |
| Composite Re-Insurers | US$3 m | US$5 m |
| Life Assurance | US$2 m | US$5 m |
| Funeral Assurance | US$1.5 m | US$2.5 m |
| Life Re-Assurance | US$1.5 m | US$5 m |
Source: IPEC
The industry’s actual capital holdings were as follows:
Life Companies (Excluding Funeral Assurers)
| Company | Capital Position
(US$) |
|
| Dec-16 | Mar-17 | |
| CBZ Life | 15 134 000 | 15 498 000 |
| Econet Life | 6 234 000 | 6 129 000 |
| Evolution Health & Life | 3 081 000 | 3 281 000 |
| Fidelity Life | 18 852 000 | 17 070 000 |
| First Mutual Life | 12 488 000 | 12 290 000 |
| Getsure Life | 3 644 000 | 3 799 000 |
| Heritage Life | 2 703 000 | 3 395 000 |
| Nyaradzo Life | 11 833 000 | 13 496 000 |
| Old Mutual Life | 160 818 000 | 162 278 000 |
| ZB Life | 14 241 000 | 15 530 000 |
| Zimnat Life | 19 874 000 | 20 759 000 |
| Total | 268 902 000 | 273 525 000 |
From the Table above, Evolution Health and Life, Getsure Life and Heritage Life were non-compliant with the US$5 million minimum capital requirement.
Non-Life Companies
| Company | Capital Position
(US$) |
|
| Dec-16 | Mar-17 | |
| Alliance Insurance Company | 5 072 004 | 4 711 507 |
| Allied Insurance Company | 1 671 164 | 1 762 885 |
| C.B.Z Insurance Company | 5 108 606 | 5 309 482 |
| Cell Insurance Company | 4 184 007 | 4 889 783 |
| Champions Insurance Company | 3 102 802 | 3 439 527 |
| Clarion Insurance Company | 1 634 918 | 2 115 896 |
| Credit Insurance Zimbabwe | 1 206 266 | 1 766 543 |
| Eagle Insurance Company | 6 553 460 | 6 518 091 |
| Evolution Insurance Company | 3 364 620 | 3 252 806 |
| Export Credit Guarantee Company | 3 160 996 | 3 315 615 |
| Hamilton Insurance Company | 2 029 696 | 1 816 055 |
| Nicoz Diamond Insurance Company | 12 123 000 | 13 241 000 |
| Old Mutual Insurance Company | 22 676 652 | 21 832 771 |
| Quality Insurance Company | 1 727 000 | 1 668 785 |
| Regal Insurance Company | 3 032 468 | 3 070 529 |
| Safel Insurance Company | 1 673 534 | 2 141 901 |
| Sanctuary Insurance Company | 1 564 233 | 1 603 451 |
| THI Insurance (Pvt) Ltd | 1 846 570 | 2 216 765 |
| Tristar Insurance Company | 2 294 938 | 2 223 485 |
| Zimnat Lion Insurance Company | 8 158 327 | 8 727 485 |
| Total | 92 185 261 | 95 624 362 |
As depicted in the Table above, 9 out of 20 non-life direct insurers were not compliant with the US$2.5 minimum capital requirement.
Funeral Companies
| Company | Capital Position ($) | |
| Dec-16 | Mar-17 | |
| Orchid | 704 000 | 708 000 |
| Doves | 20 391 000 | 20 135 000 |
| First Funeral | 6 736 000 | 6 386 000 |
| Foundation | 863 000 | 918 000 |
| Moonlight | 3 590 000 | 4 348 000 |
| Passion | 808 000 | 644 000 |
| Ruvimbo | 1 835 000 | 1 929 000 |
| Sunset | 1 501 000 | 1 504 000 |
| Vineyard | 1 888 000 | 1 958 000 |
| Total | 38 316 000 | 38 530 000 |
From the above Table, only Doves, First Funeral and Moonlight funeral companies were compliant with the US$2.5 million minimum capital requirement.
Out of the 12 reinsurers, 5 were non-compliant with the US$5 million minimum capital requirement.
Prescribed Assets Requirements
The insurance and pensions industry’s compliance with prescribed asset requirements as at 31 March 2017 was as follows.
| Insurer | Prescribed Asset
Requirement |
Compliance Level |
| Funeral | 5% | 1% |
| Life Reinsurance | 7.5% | 7% |
| Life Business | 7.5% | 13.8% |
| Pension Funds | 10% | 7% |
Source: IPEC
As depicted in the Table above, only life business was compliant to the minimum prescribed asset thresholds.
Insurance and Pensions Legislation
The Insurance and Pension Commission (IPEC) Bill and the Insurance Bill were finalised in 2016, and subsequently approved by the Cabinet Committee on Legislation (CCL) whilst the Pension and Provident Funds Bill await CCL approval before being tabled in Parliament before the end of 2017.
Interface Information Technology System
The Interface Information Technology system for IPEC was installed in 2016, with implementation having started in February 2017. The system enables e-filing of returns and timely production of reports, hence, is envisaged to improve service delivery.
Conversion of Insurance and Work by the Commission of Inquiry into the Conversion of Insurance and Pension Values from the Zimbabwe dollar to the United States dollar progressed well in 2016 and was concluded in February 2017.
The findings and recommendations of the Commission of Inquiry into the Conversion of Insurance and Pension Values will be announced once considered by His Excellency the President.
