The Insurance and Pension Commission (Ipec) says the insurance industry registered a 32% total asset base growth to $5,4 billion, as at March 2017 due to growth in equities and asset revaluations.
BY FIDELITY MHLANGA
Ipec commissioner, Tendai Karonga last week said though the insurance and pensions industry was generally stable, teething and economic problems like retrenchments and non-remittance of pension contributions were affecting the sector.
“While growth in the insurance and pensions industry has been low, the total asset base for the industry was at $5,4 billion as at March 31, 2017 compared to $4,1 billion during the same period last year 2016,” he said.
Between 2010 and 2016, Ipec approved prescribed asset applications worth about $800 million covering various sectors of the economy ranging from housing, energy, food security and other infrastructure development projects.
According to Ipec, the current insurance penetration ratio, excluding medical aid societies, stands at about 3,6%, which is higher than the average penetration ratio of 2,8% for the whole of Africa according to the Africa Insurance Barometer 2016 by the African Insurance Organisation.
However, the International Monetary Fund (IMF) puts Zimbabwe’s insurance penetration ratio at 1,7%.
Ipec expects the penetration ratio to rise to above 5% in the next three years when micro insurance is fully functional.
By January next year, the minimum capital requirement for short-term insurance will be raised from $1,5 million to $2 million and for life insurers it will double to $5 million from $2,5 million.
As of end of March 2017, only 11 out of 20 non-life insurers were compliant with the new proposed capital levels.
The 2017 Ipec first quarter report says non-life insurance companies’ profit after tax surged to $3,83 million during the first quarter of 2017 from $2,39 million during the corresponding period last year due to a rise in net premium written and reductions in operational expenses.
The life assurance sector recorded an aggregate net profit of $14 million for the quarter ended March 31, 2017, representing a 33% decline from $21 million in the comparative period in 2016.
For the quarter under review, funeral business written by both the funeral assurance players and the life assurance players amounted to $39,81 million compared to $36,26 million of the same period in 2016, registering a 10 % increase.
The insurance industry is made up of 49 insurance companies — 12 life assurers, nine funeral assurers, 20 non-life insurers, four non-life reinsurers and four composite reinsurers.