HARARE – Zimbabwe’s insurance regulator has suspended short-term insurance firm, Heritage, from issuing or renewing policies due to poor financial position.
The Insurance and Pension Commission (Ipec) yesterday said it will provide the market with updates on the companies under suspension “as and when any notable developments are reported”.
This was after the authority deregistered four insurance firms Global Insurance, New Reinsurance, Navistar Insurance Brokers and Revival Insurance Brokers in the quarter to March 2016.
Heritage joins the likes of Excellence Insurance and KMFS Insurance that were recently barred from initiating and renewing business as a result of poor corporate governance and unethical conduct.
People knowledgeable about events at Heritage said the company was working around the clock to regain its licence ahead of the June 30, 2016 deadline it was given by Ipec to regularise its financial position.
Meanwhile, Ipec said total gross premium written (GPW) by non-life insurers for the quarter ended March 31, 2016 amounted to $66,59 million against $70,89 million reported in the comparative period in 2015.
Gross premium written amounting to $24,59 million was generated through insurance brokers.
“On the other hand, total gross premium written by non-life reinsurers increased from $28,82 million for the quarter ended March 31, 2015 to $35,52 million for the quarter under review,” Ipec said in a quarterly review.
The insurance commission noted that business generated by reinsurance brokers during the quarter under review amounted to $19,46 million. In the period under review, motor and fire insurance remained the dominant classes of insurance in the non-life insurance sector.
Ipec noted that all operating underwriters reported capital positions which were compliant with the regulatory minimum of $15 million by end of March 2016.
“Total assets for the insurance industry amounted to $390,30 million reflecting a 5,17 percent increase from $371,12 million reported as at December 31, 2015.
“The industry average prescribed assets ratios for non-life insurers and reinsurers were 10,96 percent and 8,18 percent as at March 31, 2016 which were above the minimum requirement of five percent,” the regulator added.
Notwithstanding the foregoing observation, only seven direct non-life insurers and five non-life reinsurers out of the 28 operating entities respectively were compliant with the minimum prescribed asset ratio.
Ipec said owing mainly to the decrease in volume of business written, total profit after tax for non-life insurers decreased from $3,92 million for the quarter ended March 2015 to $2,39 million for the quarter under review.
“On the other hand, non-life reinsurers report total profit after tax of $3,82 million for the quarter ended 31, March 2016 compared to $2,34 million reported for the comparative period in 2015.
“The increase in profit after tax for reinsurers was mainly buoyed by increased business volume coupled with a decrease in net incurred claims,” the insurance regulator said.