Published: 10 April 2014

Life assurance companies in Zimbabwe recorded a healthy 34 percent growth in gross premiums written for the year to December 31 2013, according to the latest report released by the Insurance and Pensions Commission.

The gross premiums grew from $196 million achieved in the year to December 2012 to $262 million by December 2013.

According to the report, 92 percent ($250 million) of the gross premiums was made up of recurring business while the remaining 8 percent was new business streams buoyed by employee benefits products.

Life offices wrote $258 million in net written premiums, a 34 percent growth from $193million the prior year.

About 83 percent ($213 million) of the total net business was controlled by three top life assurance companies.

Total policies that were not taken up recorded a sharp 61 percent increase from $103 000 for the year to December 2013 to $1 million recorded in the period under review.

Life companies paid $125 million in net claims, a 42 percent increase from $88 million posted in the previous year.

According to the IPEC report, the industry's total claims bill grew by 40 percent against net premium growth rate of 34 percent, which is an indicator for the industry to proactively deploy prudent underwriting measures.

In addition, total outstanding claims in the life insurance industry grew by 14 percent to close 2013 at $2,4 million.

The commission said the life assurance reported a debtor's book totalling $7 million, 69 percent higher than the $4 million achieved in the prior comparative period.

Given a gross premium figure for the year of $262 million, the average collection rate was 97 percent lower than 98 percent over a similar period the previous year.

As at December 2013, life companies held their investments in properties, 35 percent ($533 million) higher than the 39 percent ($457 million recorded by December 2012.

Equities grew from $462 million posted for the year in December 2012 to $594 million achieved in the period under review.

Money market recorded a marginal increase from $156 million in 2012 to $177 million by year ended December 2013.

Cash assets of life assurance companies again recorded an increase from $10millionrecorded the previous year to $23 million recorded in the period under review.

The industry reported combined capital to liability and liquid ratios of 19 percent and 284 percent respectively.

The retention ratio was high, above 80 percent.

For the period under review, both reinsurers and life companies were on course to full compliance with the new minimum capital thresholds in line with requirements.

IPEC said the life industry recorded a current ratio of 795 percent and a capital to liability ratio of 37 percent.

In the medium to long term, players may be expected to hold capital which matches their liabilities in line with best practice.

Baobab Life assurance commanded 71 percent of the market share with the First Mutual Life and Health getting the balance.

IPEC urged players to compete mainly on product innovation and service in line with current economic trends.

Meanwhile Life Offices Association of Zimbabwe in association with African Insurance Organisation will host a life insurance seminar in Harare from November 3-5 this year.

The seminar will run under the theme "Demystifying Life insurance to drive African economies."

Life Offices Association of Zimbabwe chairperson Ms Ruth Ncube said the seminar is going to be a monumental occasion for the country and the local insurance industry.

The event is going to cover topics within the insurance industry such as risk management, technology and emerging markets.

AIO has members from 50 countries in the African continent.
- The Herald