ZIMBABWE’S short-term insurance sector is expected to grow further this year driven by anticipated growth in mining and agricultural sectors of the economy, an official from the Insurance Institute of Zimbabwe (IIZ) has said.
In an interview yesterday, IIZ immediate past president Simon Chapereka described the insurance sector as heavily dependent on the performance of the economy.
The capital- intensive mining sector has since overtaken agriculture as the mainstay of the economy, accounting for over 50% of total exports.
“If the government plans to put in $700 million in agriculture, it means that the returns will filter into our sector as we have seen wonders before if the agricultural sector is performing well. We are confident about the future,” he said.
Chapereka said motor insurance reflected the competitiveness of the market with close to 30 companies operating in the sector, this being a result of more cars in the country.
According to the recent Insurance Pensions Commission (IPEC) report, total gross premium written by direct non-life insurers for the half year ended June 30, 2013 amounted to $117,8 million, showing a 7,56% increase from $109,5 million in the same period in 2012.
The report states that the growth was due to increases in business generated from motor insurance as well as bonds that stood at $5 million.
Total gross premium written (GPW) by the non-life insurers was on the upward trend since 2010, but the growth rate in GPW slowed down from 40,06% in 2011, 30,27% in 2012 and 7,56% in 2013.
This may imply that the short-term insurance industry is approaching its maturity phase. IPEC reported that total assets for direct short-term insurers were generally on the upward trend since the inception of the multi-currency regime in 2009.
“The increase was on the back of increased organic growth as well as fresh capital injections by shareholders,” said the insurance regulator.
The report shows that there was a marginal decrease in total assets to $170,6 million as at June 2013 compared to $173,8 million end of March 2013 due to the shrinkage in money market investments.