Short term insurers first quarter total GWP up 520 percent
HARARE, Total Gross Premium Written (GPW) by short-term insurers amounted to ZWL$817.93 million for the quarter ended 31 March 2020, reflecting an increase of 521.59% from ZWL$131.57 million reported for the comparative period in 2019.
The total business written by short-term re-insurers increased from ZWL$60.63 million for the quarter ended 31 March 2019 to ZWL$461.27 million for the period under review.
However, in real terms, total business generated by both short-term insurance and short-term re-insurers declined by 19.65% and 1.66% respectively during the period under review.
Total assets for short-term insurers increased from ZWL$1.90 billion reported as at 31 December 2019 to ZWL$2.66 billion as at 31 March 2020. Adjusted for inflation, the assets for the short-term insurers contracted by 5% as at 31 March 2020. Sixteen (16) out of eighteen (18) short-term insurers were compliant with the minimum capital requirement of ZWL$37.5 million as at 31 March 2020.
The reported capital positions were computed without accounting for non-admissible assets as stipulated in Statutory Instrument 95 of 2017. The non-compliant players submitted their compliance roadmaps and the Commission is closely monitoring implementation of the compliance roadmaps.
Investments in prescribed assets decreased from 6.35% to 4.71% and from 10.50% to 3.04% for short-term insurers and reinsurers respectively during the period under review.
Only two (2) short-term insurance players were compliant with the minimum prescribed asset ratio of 10% as at 31 March 2020. All non-compliant players submitted their compliance roadmaps and the Commission is monitoring them closely.
Short-term reinsurers reported an asset base of ZWL$1.68 billion as at 31 March 2020, reflecting a nominal growth of 47.71% from the ZWL$1.13 billion reported as at 31 December 2019.
In real terms, the asset base for short-term reinsurers only grew by 1%. As at 31 March 2020, all the registered short-term reinsurers except one entity reported capital positions that were above the minimum capital requirement of ZWL$75 million.
During the quarter ended 31 March 2020, premium income by insurance brokers increased by 641% from ZWL$53.65 million reported for the first quarter of 2019 to ZWL$397.43 million during the comparable period in 2020.
Insurance brokers recorded ZWL$57.37 million net brokerage commission for the first quarter of 2020. In real terms, insurance brokers premium written regressed by 4.58% while brokerage commission contracted by 1.07% under the review period. This is in line with the drop in the written premium by the primary insurers in real terms.
The majority of the insurance and reinsurance brokers had regulatory capital which was in excess of the required minimum threshold of ZWL$1.5 million. However, some brokers have continuously failed to submit statutory returns to the Commission. These brokers have subsequently been excluded in the preparation of this quarterly report. The entities have been fined and the Commission is considering instituting alternative regulatory sanctions to ensure compliance.