Net premiums for life companies dropped by 2% to $171 million in the second quarter ended June 30 to $171 million, with recurring business contributing the bulk of the total business, the Insurance and Pensions Commission (Ipec) has said.
BY BUSINESS REPORTER
In the same period last year, life companies wrote $173 million in net premiums.
“Due to the premium affordability constraints and exclusion of the ever-growing informal sector during the current review period, recurring business contributed 81% of total business whilst the balance of 19% was new business. Therefore, the commission continues to encourage innovation by sector players in line with the micro insurance strategy,” Ipec said in a second quarter report for life companies.
For the period under review, fund business, funeral policies and group life assurance products contributed 88% of gross written premiums at 35%, 41% and 12% respectively.
Ipec said players should diversify their product menu.
“Innovation in both product and distribution channels is highly encouraged and Ipec is prepared to support such developments,” it said.
“There is an overreliance on fewer income streams. The commission continues to encourage players to diversify their product menu.
Innovation in both product and distribution channels is highly encouraged and Ipec is prepared to support such developments.”
Equities and properties constitute 63% of the life industry total assets despite a decrease by 9% in the value of properties from
$545 million in 2016 to $493 million in the current quarter.
“Players are encouraged to be prudent in their asset spread strategies in order to manage the investment risk. The industry should ensure compliance with investment guidelines,” Ipec said.
In the quarter ended June 30 2017, the industry realised an 87% combined ratio compared to 79% for the same period in 2016.
Ipec urged players to do cost cutting measures to safeguard sustainability of the pools together with the profitability of the business in light of the challenging environment.