Old Mutual Life Assurance maintained its dominance in the life assurance market, accounting for close to 75% of the share of gross premium written in the industry’s last financial year.
Report by Staff Writer
According to the Insurance and Pensions Commission’s (IPEC)third quarter report on the Life Assurance sector, Old Mutual, together with First Mutual Life and Zimnat Life accounted for 86% of the market share.
In the year to September 30, 2012 Old Mutual wrote business worth US$103,13 million, First Mutual was on US8,8 million while Zimnat had US$8,6 million.
The other players in the sector include Fidelity Life, ZB Life, Altfin, CBZ Life, Evolution Life and Heritage Life.
Overall, Life offices wrote premiums of US$137million in net terms for the year to September 30 2012.This reflected a 179% growth from the prior quarter. IPEC attributed this to a major player that had submitted duly signed but erroneous returns which understated its figures.
“The error has been rectified. Nevertheless the industry appears to be on a bold recovery path,” the IPEC report said.
The major contributing business streams were fund business (66%), annuities (13%) and group life assurance policies (10%).
According to IPEC, this scenario suggested a reluctant uptake of traditional life products. The business portfolio was largely dominated by the “compulsory” duo of fund business and group life assurance, accounting for a combined share of 76% of gross written business.
The report said business written was predominantly of a recurrent nature, comprising 87% of gross written premiums. This might be attributable to low business activity fuelled by liquidity challenges prevailing in the economy as well as low confidence in the life assurance industry.
“The resultant low policy values and pension benefits on conversion to the United States dollar could also be a contributory factor. To this extent, the commission will continue to probe the entire conversion process in an effort to meet fair policyholder expectations,” the IPEC report said.
In the period, the life assurance industry wrote US$145million in gross premiums, reflecting a 171% growth rate from figures reported in the previous quarter. Total costs grew by 194% to close the third quarter at US$96 million.