ZIMBABWE’S top six short-term insurance players controlled 71% of the economy’s insurance industry in 2005, up eight percentage points from 6
3% in 2004, figures released by the Insurance Council of Zimbabwe (ICZ) revealed.
Zimbabwe Stock Exchange-listed short-term insurer NicozDiamond, which recently announced a management contract with Zambian short term insurer Cavmont Insurance, maintained its position as the country’s largest sector player with a 23,95% contribution to the industry in gross premium income terms.
Another quoted concern, Zimnat Lion, was the second with a 23,95% contribution to the industry, followed by Altfin Insurance (9,9%), RM Insurance (9,24%), Eagle Insurance (8,35%) and Cell Insurance whose premium contribution ended the year at 6,47 %.
Other top 15 insurance companies included Jupiter Insurance (4,71 %), AIG Insurance (4,69%), Heritage Insurance (4,66%), Tristar Insurance (3,77%), SFG Insurance (3,31%), Excellence Insurance (3,26%), Alliance Insurance (2,61%), Global Insurance (0,70%) and Quality Insurance (0,66%).
“The scenario reflects the continued market domination by NicozDiamond whilst the relatively new player, Cell Insurance has made significant inroads into establishing itself as one of the big market players,” the ICZ said.
“The top six companies wrote about 71% of the total market premium.”
The short-term insurance sector incorporates 21 players.
These generated about $2,3 trillion in gross premiums during the period under review.
This figure represented a 187% increase in Gross Premiums from $800 billion worth of business generated in 2004.
But the council said the growth was disappointing given that inflation ended the year at 624%.
The report attributed the slow growth to subdued performance in the motoring industry due to increased competition and a crowded market.
Motor industry premium income grew by 40% in 2005.
“Besides price competition, there was also massive underinsurance as the insuring public could not keep up with the pace of inflation. The year saw a substantive shift in insuring trends from comprehensive to the more affordable forms of cover and outright self-insurance.
“The cost of adequate insurance for most mega fire policies escalated to tens of billions of dollars and most corporate clients could just not afford to increase insurance values appropriately,” the report said.
Fire insurance premium contribution was 24,41% while premium income contribution by the engineering business stood at 4,28%.
The effects of the country’s economic meltdown especially in the manufacturing and construction industries were some of the problems that affected the short term insurance sector in 2005.
Insurance experts this week said the absence of any evidence of major construction in Zimbabwe’s large cities tells a story about the gravity of the problem.