HARARE – The Insurance and Pensions Commission (Ipec) says it has placed Altfin Insurance under its watchful eyes to protect policyholder values and interests.
This was after Altfin registered a negative growth of 32 percent in the quarter to March 2016, followed by CBZ Life and Heritage which both recorded negative growth of 22 and 13 percent respectively.
“Except for two players, the life insurers were adequately capitalised as prescribed by Statutory Instrument 21 of 2013.
“Care and maintenance measures continue to be applied especially to Altfin Life.” Ipec said.
Altfin shareholders were late last year summoned by Ipec to discuss the firm’s recapitalisation process
after the insurance company had failed to meet the prescribed $2 million capitalisation requirement.
In its Life Report for Life assurers for the quarter ended September 30, 2015, Ipec said it was working with Altfin as to the next course of action in line with the Insurance Act.
Altfin, whose licence was cancelled at the beginning of 2015, recorded $7,1 million current liabilities compared to $3,1 million current assets in the quarter to September 2015 and indications are the company is still in the woods.
The insurance firm’s woes started a few years ago following the collapse of Interfin Bank, which failed to settle total gross outstanding claims resulting in Altfin being left exposed to a $3 million deficit as at December 31, 2013.
Meanwhile, all the 13 life insurers reviewed by Ipec paid a total of $46 million in net claims during the first quarter of 2016, a 14 percent increase prior year on the back of a tough operating environment.
In its report for the first three months of the year, Ipec said the insurers had paid out claims to the tune of $33 million prior period comparative.
“Total claims expenditure grew by 41 percent against the net premium growth rate of 18 percent reflecting an unfavourable imbalance given the challenging investment environment,” the insurance industry regulator said.
During the period under review, major claim types were surrenders, maturity and death.
However, with a debtor’s book worth $5 million out of gross premium written of $88 million, the sector had a premium collection rate of 94 percent.
“This is deemed reasonable in view of the challenging liquidity environment prevailing currently,” Ipec said.
Meanwhile, reinsurers wrote $1,4 million in net written premiums 22 percent down from $1,8 million despite FBC coming on board by opening a life reinsurance division.
“This could be attributed to limited local growth opportunities and increased capacity to retain risks on their balance sheets,” Ipec said.