Life Assurers grow in half year despite challenging environment
HARARE, The Life Assurance sector showed sign of growth in premium income and asset base for the half year ended 30 June 2018, despite the challenging economic environment.
Latest IPEC report shows that Gross premium written (GPW) increased to $200 million, representing a 16% increase from $173.1 million reported in the comparative period in 2017.
“This growth was mainly attributable to an increase in business generated from fund business and funeral assurance business, which increase totalled $21.54 million,” Ipec said.
Fund and funeral assurance business remained the major sources of business for life assurance companies during the period as they
accounted for a total of 77% of gross premium written.
Funeral assurance policies continued to dominate consumers’ list of life insurance priorities because of their nature and purpose.
The life assurance sector registered an 11% growth in total assets from $2.4 billion as at 31 March 2018 to $2.6 billion as at 30 June
2018 with the growth attributable to the strong performance by the equities market which resulted in values of shares going up.
On the other hand life reassurance companies GPW grew by 16% to $4.1 million for the year to 30 June 2018 from $3.5 million reported for
the half year ended 30 June 2017.
For the half year ended 30 June 2018, direct life assurers wrote $200 million in gross premium and ceded about $3.3 million which is 1% of
the total gross premium written, thereby retaining 9% of the business written.
A total profit after tax for life assurers decreased from $217 million for the quarter ended 30 June 2017 to $147.6 million for the quarter
ended 30 June 2018 (See Annexure 12).
The decrease was mainly owing to a huge decline in investment income from $196.7 million for the half year ended 30 June 2017 to $96
million for the half year ended 30 June 2018,
The decrease in profit after tax was also on the back of a 4% surge in expenses from $149 million for the half year ended 30 June 2017 to
$155 million for the half year ended 30 June As at 30 June 2018, 4 out of 5 registered composite reassurers reported capital positions which were compliant with the minimum capital requirement of $7.5 million.
As at 30 June 2018, the average prescribed ratio stood at 11.91% and 5.74% for life assurers and life reassures respectively.
Nine (9) out of Eleven (11) operating life assurance institutions and four (4) out of five (5) composite reassurance institutions reported
capital positions which were in compliance with the prescribed minimum capital requirements.
A total of 8 out of the 11 direct life assurance companies and 3 out of 5 life reassurance institutions were
