Short-term insurance sector sees 56pc drop in registered entities
The Insurance and Pensions Commission (Ipec) licence verification exercise led to a 56 percent decrease in the number of registered entities or individuals in the short-term insurance industry, dropping from 1 281 to 561 as of September 30, 2024, according to a report.
Ipec is a statutory body tasked with regulating, supervising, and developing the insurance and pensions industry to protect policyholders and pension scheme members in Zimbabwe.
In its Short-Term Insurance Industry Report for the nine months ending September 30, 2024, Ipec stated that there were 561 registered entities/persons in the short-term insurance industry as of September 30, 2024, a 56 percent decline from the 1 281 registered players/persons recorded on September 30, 2023.
“The decrease is attributed to a licence verification exercise undertaken by the Commission. All insurers were required to submit their list of agents in terms of Section 17(2) of the Insurance Regulations SI 49 of 1989, as amended.
“This resulted in 720 agent licences being deemed invalid because the agents had either ceased representing the insurer or their licences had expired and were not renewed,” reads part of the report.
During the third quarter of 2024, the Commission registered one micro-insurer, eight corporate agents, two multiple agents, and eighteen individual agents. Additionally, Ipec renewed four individual agent licences and one multiple agent licence, bringing the total number of registrations to 34 during the third quarter and 56 for the first nine months of 2024.
For the period under review, short-term insurers reported insurance revenue amounting to ZWG2,53 billion. The motor, fire, and farming classes of business were the primary revenue drivers, collectively contributing 71 percent of the total revenue.
Foreign-currency-denominated insurance revenue was reported at US$153,97 million during the same period.
Old Mutual Insurance, Nicoz Diamond Insurance Company, and Alliance Insurance dominated the market, holding a combined market share of 52 percent in terms of foreign currency-denominated insurance revenue.
As of September 30, 2024, direct insurers had underwritten 605 518 policies, an increase from the 419 818 policies recorded as of June 2024.
In the third quarter alone, 237 511 new policies were underwritten, while 51 811 policies were cancelled or expired. Most of the policies issued during the nine-month period were in the motor insurance sector, which accounted for 535 685 policies, constituting 88 percent of the total.
All 19 short-term insurers reported capital levels above the minimum capital requirement of ZWG15 008 as of September 30, 2024. Investments in prescribed assets by short-term insurers totalled ZWG320,82 million, reflecting an average compliance level of 11 percent, an increase from the ZWG160,12 million (8 percent compliance level) recorded as of June 30, 2024.
Ten out of the 19 insurers met the minimum prescribed asset ratio of 10 percent, with investments primarily composed of Treasury Bills, Corporate Bonds, and private equities.
For the nine months ending September 30, 2024, insurance brokers recorded gross premiums of ZWG1,9 billion and net brokerage commission of ZWG260 million. Regarding foreign currency-denominated business, insurance brokers reported gross premiums of US$105 million and net brokerage commission of US$14,8 million.
Reinsurance brokers reported gross premiums of ZWG1,1 billion and net brokerage commission of ZWG39,8 million. For foreign-currency-denominated business, reinsurance brokers recorded gross premiums of US$69 million and net brokerage commission of US$2,4 million during the same period.chroncile
