SHORT TERM (NON-LIFE) INSURANCE REPORT FOR THE QUARTER ENDED 30 JUNE 2018
Executive Summary
HARARE, Total Gross Premium Written (GPW) by non-life insurers amounted to $144.18 million for the half year ended 30 June 2018, reflecting a 15.44% increase from $124.90 million reported for the comparative period in 2017.
On the other hand, GPW reported by non-life reinsurers declined from $60.19 million for the half year ended 30 June 2017 to $57.83 million for the half year ended 30 June 2018, representing a drop of 3.9%.
This drop comes in the wake of an increase in risk appetite by direct non-life insurers as reflected by a significant increase in average retention ratio from 60.21% for the half year ended 30 June 2017 to 70.21% for the period under review.
Total assets for the insurance industry shrunk by 5.54% from $470.44 million as at 31 March 2018 to $444.38 million as at 30 June 2018.
Non-life insurers reported total assets of $256.77 million which accounted for 57.78% of the total assets for the industry as at 30 June 2018. This was followed by reinsurance companies which reported total assets of $156.02 million which contributed 35.11 of the total industry assets.
Investments in prescribed assets for the whole insurance industry rose by 3.82% from $37.73 million as at 31 March 2018 to $39.17 million as at 30 June 2018. The total investments in prescribed assets as at 30 June 2018 translated into an industry average prescribed asset ratios of 9.25% and 12.88% for non-life insurers and non-life reinsurers respectively, which were above the regulatory minimum of 5%.
Notwithstanding the above position, eleven (11) non-life insurers and two (2) non-life reinsurers were not compliant with the regulatory minimum threshold for prescribed assets as at 30 June 2018. The Commission has since engaged the companies to address the regulatory anomaly.
A total of sixteen (16) out of twenty (20) insurers reported capital positions which were above $2.5 million as at 30 June 2018. The reported capital positions were computed without accounting for non-admissible assets as stipulated in Statutory Instrument 95 of 2017. All the registered non-life reinsurers reported capital positions that were above the minimum capital requirement of $5 million.
The non-life insurers reported total profit after tax for the half year ended 30 June 2018 of $16.94 million, which was 52.34% increase from $11.12 million reported in the comparative period in 2017 while total profits after tax for non-life reinsurers decreased from $5.0 million for the half year ended 30 June 2017 to $ 4.8 million for the half year ended 30 June 2018.
Insurance brokers wrote $59.04 million in premium income for the half year ended 30 June 2018. This represented a 22.33% increase in business written by insurance brokers from $48.26 million reported for the same period in 2017. Insurance brokers recorded $9.26 million net brokerage commission since 1 January 2018. Compared to the same period in 2017, this represented a 15.79% increase from $7.99 million reported.
One (1) out of 31 insurance brokers was not compliant with the minimum capital required to establish and operate an insurance broking firm. The Commission is closely monitoring the recapitalisation plan which the broker submitted.
Reinsurance brokers reported $42,87 million in gross premium for the half year ended 30 June 2018 reflecting an increase of 20.10% from the $35,70 million reported for the same period in 2017.
The industry average commission ratio for reinsurance brokers was 23.50% for the half year ended 30 June 2018, an increase from 19.80% reported for the same period in 2017. All reinsurance brokers, except one (1), reported capital positions which were above $100,000 as at 30 June 2018.
