NicozDiamond GPW in massive growth
HARARE, Short term insurer, NicozDiamond says gross premium written (GPW) in 2020 grew by 669 percent to $2,07 billion driven by new business and revaluation of insurance portfolios in response to inflationary pressure, resulting in net earned premium growth of 680 percent.
Chairman Elisha Moyo said the group had an investment profit of $13,3 million on the listed portfolio and a fair value gain of $649 million driven by inflationary adjustments.
“The regulatory capital of Nicozdiamond strengthened by 401 percent to close the year at $328,5 million compared to the required $37,5 million in 2019,” he said.
Managing Director, David Nyabadza said the industry experienced nominal growth in GWP attributable to insurance premiums closely tracking inflation currency reforms.
He said motor, fire and engineering insurance business classes were the major sources of the sectors GWP contributing over 75 percent of the overall business written during the year. “Collection of debtors remained a major challenge in the industry,” he said.
On operations, Nyabadza said in Zimbabwe, gross premium grew 664 percent to $1,4 billion compared to prior year.
“The favourable growth from prior year was driven by asset revaluations in response to inflationary conditions, new business written and organic growth on the existing portfolio. Motor remained the dominant class followed by Fire and Accident,” he said.
Nyabadza said the claims experience which grew by 440 percent compared to 2019 were contained well within earned premium growth of 659 percent.
“The overall loss ratio for the business improved to 36 percent compared to 43 percent in 2019,” he said.
He added that the claims benefited from Covid 19 induced movement restrictions which reduced claims incidence while reinsurance arrangements also limited the impact of hyperinflation in the first half of the year by capping losses.
Nyabadza said the underwriting result at $322 million grew 807 percent as a result of claims and operational expenses growth that were both contained below the growth in premium revenue.
In Mozambique, Nyabadza said despite the covid 19 pandemic, GWP grew 21 percent compared to prior year driven by enhanced confidence subsequent to the recapitalization of the business in 2019 and increased business from main supporting brokers.
Claims in Mozambique went down by 26 percent relative to prior year largely due to a favourable claims experience and the covid 19 lockdown contributed to a low claim ratio together with measures put in place by management to control claims costs.
“The company recorded an underwriting profit of US$153 000 in 2020 compared to an underwriting loss posted in 2019 of US$135 000 spurred by an increase in net earned premium and a reduction in claims costs,” Nyabadza said.