ZHL’s BaobabRe leads market in terms of GWP as Group Rebrands

ZHL’s BaobabRe leads market in terms of GWP as Group Rebrands

By Insurance24

HARARE, Zimre Holdings Limited’s re-insurance unit BaobaRe was market leader in term of Gross Premium Written (GWP) for the third quarter ended September 2017 having written $2.95 mln which was however lower than $3.19 mln same period in 2016.

According to regulator IPEC quarterly report, First Mutual Re with a GPW of $1.5 mln against $2 mln in 2016 seconded BaobabRe on share of GWP.  FBC Re and FM Re experienced negative growth rates of 5.9% and 27.3% respectively.

Zimre Holdings which is in the process of rebranding its operations only yesterday financed an insurance reporting workshop for journalists in Harare which was conducted by Reuters in partnership with a local media FinGaz.

The workshop was aimed at capacitating journalists on insurance reporting and be able to identify real issues that need attention in the insurance sector.

Following the loss of value and investments during the conversion from the Zim-Dollar to US Dollar, the insurance sector has suffered confidence deficiencies, thus the capacity workshop was to equip journalists for responsible reporting that bridges the gap of confidence as the sector is a key pillar in the economy transformation matrix.

ZHL which is due to rebrand Zimbabwe operations to Emeritus Re this month is reportedly to have already rebranded its regional operations in Botswana, Mozambique and Zambia.

Meanwhile, back to the IPEC report, the Reassurers wrote business amounting to $5 million in net premiums compared to $4.7 million in the same period in 2016.

For the quarter under review, the total of reassurance business written translated to a positive growth of 9% attributable to Grand Re and Zep Re coming on board.

On cost drivers, the life reassurance business had a combined ratio of 104%, which was mainly attributed to an increase in claims that were not reported on time and had to be settled in the current review period.

Total costs for reassures stood at $5.3 million and underwriting profit was $102 thousand and industry players are advised to employ cost cutting measures in order to increase profitability.

BaobabRe total costs amounted to $2.65 mln with claim constituting the bulk at $1.29 mln, followed by Commissions of $747 000 and a $610 000 related to management and administration expenses. This was against net premiums of $2.62 mln which resulted in an underwriting loss of $34 000.

The company’s expense ratio at 52% is fairly high, together with a claims ratio of 50% resulting in a combined ratio of 101% which is not sustainable to achieve profitability.

Among the five reinsurers, only FBC Re achieved a profit during the period under review. The company’s expense ratio is 18% although claims ratio was 76% as a result of $715 000 worth of claims against net premium of $1.16 mln.

Other reinsurers FM Re, Grande Re and Zep Re incurred losses during the quarter largely as a result of high claims.

In terms of capitalization and solvency,  all composite life reassurers were fully capitalized in terms of statutory instrument 95 of 2017. Players reported a current ratio of 193% which is a decrease from 211% the previous year and a capital to liability ratio of 157%, which is an increase from 107%.

Total reassures assets base grew by 3% from $52.7 million in 2016 to $54.3 million in 2017. The report says Equities and money markets were major movers while other assets like fixed properties had a negative growth of 79%.

On compliance in Prescribed Assets Baobab Re, FBC Re, FM Re, Zep Re and Grand Re had prescribed asset ratios of 8.44%, 10.26%, 11.99%, 0% and 0% respectively. Only three (3) of five (5) reassures are in compliant with the prescribed asset status.