ZIMBABWE’S short term insurers’ after tax profit for the second quarter ending June was down 12% to US$5,23 million compared to the same period last year weighed down by rising claims and operating costs despite strong growth in gross premium written, a regulator’s shows.
According to the latest Insurance and Pension Commission (IPEC) report on non-life insurance firms, four registered insurance companies and one reinsurer were not compliant with the regulatory minimum capital requirement of US$1,5 million as at 30 June 2015.
Total gross premium written by non-life insurers amounted to US$120,31 million for the half year ended 30 June 2015 compared to US$116,89 million reported for the comparative period in 2014. Of this, US$49,92 million was generated through brokers.
Of all the underwriters, IPEC said, only four reinsurance companies were compliant with the minimum prescribed asset ratio of 5% as at 30 June 2015.
Total assets for the non-life insurance sector decreased from US$364,46 million as at 31 March 2015 to US$348,07 million as at 30 June 2015 owing to a decrease in premium debtors.
“Total profit after tax for non-life insurers amounted to US$5,23 million for the half year ended 30 June 2015, reflecting a 12,05% decrease from US$5,95 million reported for the comparative period in 2014,” reads the report in part.
“The decrease in total profit after tax was mainly attributable to an upsurge in net incurred claims coupled with increasing operational costs. On the other hand, total profit after tax for non-life reinsurers increased from US$0,72 million for the half year ended 30 June 2014 to US$3,40 million for the period under review on the back of increased volumes coupled with decreases in net claims incurred.”
The report further shows that out of the registered underwriters, four insurance companies namely Excellence Insurance Company, Global Insurance Company and KMFS Insurance Company Export Credit Guarantee Corporation (ECGC), as well as one reinsurer namely New Reinsurance Company of Harare respectively were suspended from both initiating and renewing business as at 30 June 2015.
Total gross premium written by non-life reinsurers, according to the report increased from US$56,25 million for the half year period ended 30 June 2014 to US$60,18 million for the half year period ended 30 June 2015, it says.
“On the other hand, total premium generated by reinsurers through reinsurance brokers during the period under review amounted to US$35,83 million. Motor and fire insurance remained the dominant classes of insurance in the non-life insurance sector,” the report reads.-Bernard Mpofu