Staff Writer
Insurance and pensions industry regulator, IPEC says the life assurance industry is moving long term products to pre-dominantly annually renewable products which is inconsistent with the spirit and intention of the Funeral Directive.
According to the Q4 2024, life assurance report, the direct life insurers reported insurance revenue of ZiG3.15 billion, equivalent to US$175 million, during the review period, converted using the average official exchange rate.
Primary revenue drivers in the life assurance sector were funeral assurance and group life assurance and they jointly contributed 86.75% of the total revenue.
“An issue to also note is that the life assurance industry is moving long term products to pre-dominantly annually renewable products, as most funeral assurance policies and group life assurance policies being sold in the market are annually renewable.
“This is inconsistent with the spirit and intention of the Funeral Directive, particularly the protection of policyholders, hence the industry is called upon to comply with the Funeral Directive,” the regulator said.
According to the report, the proportion of funeral assurance and group life assurance to total revenue has been steadily increasing at the expense of traditional life assurance products.
Market share
For the period under review, Nyaradzo Life Assurance Company leads the life assurance sector, with a 45.97% market share, primarily driven by revenue from the funeral assurance business.
The combined revenue of the top five companies in the sector reached ZWG2.65 billion, equivalent to US$147.23 million, based on the average interbank rate for the period.
“The top five life assurers account for 84% of the sector’s total revenue, highlighting a notable concentration of revenue among the leading five entities,” the report said.
Ipec said the Herfindahl-Hirschman Index (HHI) for the life assurance industry is 2,561, indicating a highly concentrated market. “This suggests that a few dominant firms control a significant market share, leading to reduced competition,.”
Insurance Revenue by Product
Funeral assurance remains the dominant product within the life assurance sector, contributing 70.82% of total revenue.
Group life assurance follows, generating 15.93% of total revenue and the remaining 13.26% of revenue comes from other life insurance products, including endowment plans, term assurance, and wholelife policies.
The regulator said restoring consumer confidence is a key priority for the life insurance industry to reignite interest and uptake of long-term insurance products.
“The industry is urged to drive innovation by developing products that align with market needs,” reads the report.
