HomeBusinessNon-life insurance companies profits increased to $3,83m

Non-life insurance companies profits increased to $3,83m

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NON-life insurance companies’ profit after tax surged to $3,83 million during the first quarter of 2017 due to a rise in net premium written and reductions in operational expenses.

BY FIDELITY MHLANGA

The surge was from a previous of $2,39 million during the same period under review in 2016.

According to the 2017 Insurance and Pensions Commission (Ipec) first quarter report non-life insurers reported an increase in total gross premium written (GPW) amounting to $68,22 million for the quarter ended March 31 2017.

This compared to $66,59 million reported during the same period in 2016.

The asset base for the insurance industry also increased to $409,62 million as at March 31, 2017 from $390,30 million over the same period in 2016.

“The non-life insurance industry reported an industry average prescribed assets ratio of 12,3% as at March 31, 2017, which was compliant with the minimum requirement of 5%. Only eleven out of the twenty operating insurers were compliant with the minimum prescribed assets ratio. A total of two insurers did not have any investments in prescribed assets.
It is a statutory requirement for Insurers to invest in prescribed assets,” Ipec said.

The industry average prescribed asset ratios for non-life insurers and reinsurers were 12,3% and 13,64% respectively as at 31 March 2017, compared to the minimum requirement of 5%.

The report noted that the number of registered players, including insurance agents and loss adjusters, increased to 575 as at March 31, 2017 from a previous of 573 during the comparative period in 2016.

Insurance brokers generated $24,09 million of gross premium for the quarter ended March 31 2017, a 2,02% decline from the $24,59 million written for the quarter ended March 31, 2016.

The business written by reinsurers also decreased to $32,60 million for the quarter ended March 2017 from $35,52 million written for the quarter ended March 31, 2016.

Reinsurance brokers contributed 52,7% of the reinsurer’s total premiums, writing $17,18 million premiums for the quarter ended March 31, 2017.

Ipec report noted that of the 20 operational insurers and eight operational reinsurers, only one player, a reinsurer reported a capital position below the regulatory minimum capital requirement of $1,5 million as at March 31, 2017.

As at March 31, 2017, 11 of the insurers were already compliant with the proposed $2,5 million capital level.

“However, 9 insurers and 1 reinsurer were not compliant with the minimum prescribed asset ratio. The retention ratio, which shows risk appetite, for insurance companies averaged 59,70% as at March 31, 2017, increasing from the 53,90% average as at March 31, 2016. There was however, a decline in the retention ratio for non-life reinsurance companies from 63,85% to 56,23% reported as at March 31, 2016 and 2017 respectively,” noted the report.

Non-life reinsurers reported a profit after tax of $3,03 million for the quarter under review, which is a decrease from $3,82 million reported for the quarter ended March 31, 2016.

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