Private sector to compensate loss of value suffered by policy holders and pensioners during ZW/USDollar conversion….Life Assurance sector gross premium increase 4% in Q3
By Insurance24
HARARE, The Commission of Inquiry that looked into the conversion of insurance and pension values from the Zimbabwe dollar to the United States Dollar has concluded that it is of the view that a fair and just compensation framework be implemented to compensate for the loss of value suffered by policy holders and pensioners.
According to sources, the Commission was satisfied with industry capacity to make good and compensate policy holders and pension fund members after assessing the asset and capital structure of the industry. More details to follow.
Meanwhile, the aggregate Zimbabwe life assurance industry gross premiums written totaled $272 million for the third quarter of 2017 with Life assurers accounting for $266 million, an increase of 4% over the $257 million written during the previous reporting period.
According to the Insurance and Pensions Commission (IPEC) quarterly report Reassurers accounted for $5.9 million, an increase of 1% over USD5.9 million in premiums written during the previous comparative quarter.
For the quarter under review, total costs are reported at $223 million a decrease from $246 million for the same comparative period in 2016. It consisted of total net claims of $142 million, management and administration expenses of $68 million and commissions of $13 million.
As a result, Nine (9) of the eleven (11) life assurers reported positive underwriting profit whilst two (2) life assurers reported underwriting losses.
Life Insurance sector equity assets increased by a significant 311% in the third quarter of 2017 to $1.43 billion from $348.47 million in 2016 spurred by the Zimbabwe Stock Exchange rally. This increase resulted in an 83% growth in total industry assets in Q3 to $2.7 billion compared to the same comparative quarter of 2016.
During the quarter under review, property asset values decreased by 11%, while equities increased by 311%. Money market values marginally increased while prescribed assets were up 31% to $235.6 million.
IPEC said there was a decrease of 11% in the value of properties from $560 million in 2016 to $499 million in the quarter under review. Property and equities constitute 72% of the assets which is a high level of concentration.
New business written by the life assurance sector for both individual life and group business decreased by 26% and 2% respectively largely due to the constant liquidity challenges in the economy.
An increase of 18% was recorded on recurring business for the individual business. A decrease of 2% was recorded for group business.
Claims age statistics showed that some players reported claims in excess of 121 days while the majority had outstanding claims aged in excess of 30 days. The Commission expects players to pay legitimate claims on time and as per the policy conditions. IPEC said it expects players to pay legitimate claims on time and as per the policy conditions.
