Zimbabwe’s insurance sector to grow on positive sentiment by new Government, Research.
Premiums projected a 4.8% year on year growth in next 5 years.
Insrance24 Reporter
HARARE, Zimbabwe’s insurance markets will depend heavily on the post-Mugabe regime making good on promises to open up the economy, re-engage meaningfully with creditors and crackdown on corruption but premium growth is expected to increase 4,8% per annum in the next 5 years while a 5,1% projection is anticipated for the non life sector.
According to a research by a Fitch research company, BMI, across the course of our five year forecast period, an average growth in non-life premiums written of 5.1% per annum is predicted, taking the total value of premiums to US$277mn in 2021, up from US$224mn in 2017.
“After estimated growth of 4.0% in 2017, we forecast that life premiums will grow by 3.6% in 2018, as monetary conditions remain challenging initially, before accelerating to premium growth of 6.1% in 2019.
While acknowledging significant potential for reform and growth from a depressed base, we offer only a cautiously positive core forecast scenario for the time being, predicting that premium growth will
average 4.8% per annum in US dollar terms over the next five years in the life sector, and 5.1% per year in the non-life sector, with the pace picking up beyond 2018.,” noted BMI
While all forecasts are in dollar terms, given that Zimbabwe’s economy remains dollarized, BMI anticipates that the dollar value of premiums in the non-life sector will rise by 3.9% in both 2017 and 2018, before
moving onto a higher growth path.
”The key downside risk to our current forecasts is that Zimbabwe fails to recover from recession, or enters a fresh downturn within the next two years due to a disappointment of newly raised expectations of a
sustainable recovery,” said BMI
The report went on to note that newly elevated President Emmerson Mnangagwa’s reformist credentials will be put to the test, with no guarantee of success, especially given that he was hardly a sleeping passenger during the poor governance of recent decades.
There are also upside risks to the life insurance (and non-life insurance) forecasts. Zimbabwe has a highly educated population, parts of the country’s physical infrastructure remain in good shape and significant potential could be unleashed in the event that the new regime does re-engage with creditors and the wider international community in reasonably good faith, especially given that economic activity is at a low base,relative to the mid to late 1990s.
“Under even a moderately reformist direction, a reversal of the long-running brain drain would also add to the country’s prospects. On balance, risks to our insurance forecasts are moderately tilted to the upside.
In the event that reform momentum is strong in Zimbabwe and the economy develops more rapidly than currently envisaged, the non-life sector is likely to benefit a little more strongly than the life sector, given the positive impact of higher economic growth on demand for big ticket consumer items, including motor vehicles,’ said BMI
NB//Insurance24, in our first publication of 2018, we take this opportunity to says compliments of the new season. We look forward to continued support and a prosperous working relationship in 2018 and beyond.
For more information and inquiries on advertising and publications contact info below
0776886027
About US
Insurance24 (www.insurance24.co.zw) is an online news and insurance research company whose primary aim is to provide insurance news, data and research online. It prides itself of being real-time, always first with any insurance, pensions, financial information and data. Our aim is provide timeous and accurate information to various people. Our subscribers include mostly professionals, CEOs, directors, senior managers, farmers and politicians in and out of Zimbabwe. This medium will assist you to reach a well-targeted audience of decision makers for less than 0.1c per potential customer per month.
We believe the two level pass on rate for Insurance24 publications is at least two forwards of each of the emails we send out. We have a primary mailing list of just over 15 000 meaning that potentially at least 30 000 people read at least one Insurance24 publication everyday. We also have a website which presently has an average readership of 2 000 per every article posted.
We offer an advertising platform that reaches out to thousands significant players on the insurance, pensions and financial markets daily. Advertising space is available on newsletters and on our websites.
