ZIMBABWE’S insurance sector registered a 52% real growth in the year to June, driven mainly by gross premium written, the Insurance and Pensions Commission (Ipec) has revealed.
Speaking to journalists during a virtual 2020 insurance and pensions mentorship programme on Tuesday, IPEC commissioner of insurance, pension and provident funds, Grace Muradzikwa said the industry registered growth under difficult circumstances.
BY MTHANDAZO NYONI
“According to the statistics that we have currently in the commission, gross premium written for the insurance sector increased by 784% between June 2019 and June 2020. This is against average annual inflation of around 732%,” she said.
“So the industry actually registered a real growth of about 52% and in terms of combined asset base, this growth from April 2020 to June 2020, was 247%, from $24,2 billion to $59,7 billion,” Muradzikwa said.
Combined gross premium written recorded $5,96 billion in June this year from $760 million recorded in the same period last year, a normal growth of 522%.
Muradzikwa said the main challenges that the sector was facing include low confidence mainly owing to loss of value as a result of hyperinflationary legacy issues; low uptake of insurance products; insurance fraud; high levels of premium debtors; and liquidity challenges.
She said a recent baseline survey revealed that only 34% of the population of Zimbabwe had insurance of some sort, 76% of which is in respect of funeral assurance policies.
“We have seen a very high demand for United States dollar policies, you know almost on a daily basis, the commission is having to review and assess applications for US$ policies and this is really speaking to product relevance and low confidence levels that the industry is currently experiencing,” she said
“We have seen high levels of insurance fraud and in fact it is estimated that probably between 25% and 30% of claims that are paid by the insurance sector are fraudulent claims. We have also seen high levels of premium debtors, that’s the ratio of premium debtors has been averaging at 30% and this is really high given that it’s a hyperinflationary environment,” she said.
Currently, there are 2 280 registered entities in the insurance sector and these include corporate and sole agents (2 194), insurance brokers (32), short-term insurances (18), life assurances (12), eight funeral assurances, eight reinsurances, seven reinsurance brokers and one microinsurance entity.