Motor and personal insurance drive non-insurers growth in Q1 2018
HARARE, Non-life insurers reported a 10, 3% growth in total Gross Premium Written (GPW) in Q1 2018 to $75, 3 million $68, 2 million attained same period in 2017.
The increase in GPW was mainly attributable to growth in business generated from motor insurance, as well as personal liability insurance classes.
According to a Q1 report from the Insurance and Pension Commission (Ipec) the two business classes recorded a combined growth in GPW amounting to $5,4 million during the quarter.
Motor and fire insurance remained as major sources of business as the two classes accounted for $48.29 million of the total GPW of $75.31 million, which translated to 64.12% of total GPW for the quarter under review.
On the other hand, there was an insignificant change in the volume of business written by non-life reinsurers during the quarter under review evidenced by the marginal increase in GPW to $33,05 million from $32,60 million for the quarter ending 31 March 2017.
The industry average retention ratio rose from 59.70% for the quarter ended 31 March 2017 to 61.53% for the quarter under review. This indicates an improvement in risk appetite among the non-life insurance industry. Retention ratios for individual insurers ranged from 16.96%
to 100%
The average reinsurance creditors to reinsurance premium ratio was 95.33% for the quarter ended 31 March 2018, compared to 95.07% reported for the comparative period in 2017.
“Insurance players are encouraged to ensure that they settle their treaty premiums in accordance with their treaty contracts timely. The Commission is continuously engaging the Reserve Bank of Zimbabwe (RBZ) to ensure high priority is placed on retrocession payments. The insurance players are further reminded that inability to have a functional treaty programme in place is a regulatory and compliance issue, “said Ipec.
During the period total assets for the insurance industry grew by 9,27% to $470,44 million from $430,52 million as at 31 December 2017 to with Non-life insurers contributing 54,93% of the total assets for the industry with US$258,43 million, followed by reinsurance companies
withUS$150,75 million.
This signified a 32, 04% of non-life market share as at 31 March 2018. On the hand ,Investments in prescribed assets for the whole insurance industry rose by 7,19% US$3,73 million as at 31 March 2018 from US$35.20million as at 31 December 2017 showing a positive response to the Commission’s efforts in addressing regulatory and compliance gaps in the asset spread.
A total of seventeen (17), out of the twenty (20) registered insurers reported capital positions which were above the minimum capital level of $2.5 million.
“However, the reported capital positions were not adjusted in line with provisions of Statutory Instrument 95 of 2017. All the registered non-life reinsurers, with the exception of two reinsurers, reported capital positions that were above the minimum capital requirement of $5 million,” said Ipec.
Insurance brokers reported $31.2 million in premium income for the quarter ended 31 March2018, which shows a 29.63% increase in business written from $24.09 million reported for the same period in 2017.
They further recorded a $4.87 million net brokerage commission for the quarter ended 31 March 2018, which was a 22.34% growth from $3.98 million recorded during the same period in 2017.
Two (2) out of 31 insurance brokers were not compliant with the minimum capital required to establish and operate an insurance broking firm. The two brokers have since submitted their recapitalization plans.
Reinsurance brokers reported $19.62 million in Gross Premium for the quarter under review, marking an increase of 14.24% from the $17.18 million reported for the same period in 2017.
In terms of capitalisation all the reinsurance brokers were compliant with the minimum capital required to operate such form of business as at 31 March 2018.
