Ron Mutandagayi, ZB Holdings chief executive
ZB Holdings still keen on regional expansion…as net insurance income increase in H1
Staff Writer
HARARE, ZB Holdings net business income from insurance operations for the half year 2019 increased 44% to ZW$7 mln from ZW$4,9mln for the half year ended 30 June 2018 with growth in reinsurance premiums reflecting a partial restoration of covers against rising inflation.
Gross insurance premiums increased 28% to ZW$21,2m from ZW$16,5m earned during the first half of 2018 and ZB CEO Ron Mutandagayi said among other things, this growth represented a pattern of trailing replenishment of covers against the background of rampant inflation.
The countries year on year inflation in June surged 175,66 % and has seen an increase in the price of commodities but for the insurance sector , erosion of values has been inevitable with a number of companies struggling to settle claims.
Life assurance premiums improved on the back of a high persistency ratio despite a drop in disposable incomes.
Mutandagayi said despite a 22% increase in benefits, claims and related expenses, the aggregated insurance expenses ratio, improved from 70% for the half year ended 30 June 2018 to 67% for the same period in 2019.
“Resultantly, the net business income from insurance operations increased by 44% from ZW$4.9m for the half year ended 30 June 2018 to ZW$7.0m for the same period in 2019,” he said.
Foreign premium contribution reduced from ZW$0.66m HY18 to ZW$0.48m HY19 in line with the increase in exchange risk on the local market.
Total reinsurance expenses increased by 53% on the back of a 171% increase in net claims, a 116% increase in commissions, and a 80% net movement in the unearned premium reserve.
Retrocession premiums reduced by 58% while the technical expenses ratio remained at an acceptable level at 83%.
Life assurance income improved by 37%, driven by a 15% increase in gross premiums which was partially offset by a 7% increase in policy benefits and reassurance premium commission expenses.
The Expense Ratio also improved from 50.5% at HY18 to 40.9% at HY19. In the outlook, Mutandagayi said the Regional expansion for ZB Reinsurance remained on the cards and capitalization models are under consideration.
