By Business Reporter
Gross premium written (GPW) by direct life assurance companies for the financial year ended 31 December 2020 stood at ZW$3.65 billion, representing a nominal increase of 512% from ZW$596.93 million reported in the comparative period in 2019. Life Assurance Sector Report For The Year Ended 31 December 2020.
“The increase in GPW for the reporting period was mainly due to significant increase in premiums from funeral assurance and group life assurance classes,” the report said.
“Growth in GPW in the above-mentioned classes was mainly driven by premium increases in these classes of business.”
“Inflation adjusted GPW for direct life assurers was ZW$814 million showing a growth of 36.36%, indicating real growth in premium, above the year-on-year inflation which stood at 348.6% for December 2020.”
GPW for life reassurers grew by 690.68% from ZW$22.16 million reported for the year ended December 2019 to ZW$153.08 million for the year ended 31 December 2020.
On inflation adjusted basis, the GPW for direct life reassurers experienced a growth of 53.96% to ZW$34.13 million for the financial year ended 31 December 2020.
For the year ended 31 December 2020 the Life Assurance industry reported foreign currency denominated business amounting to USD952, 000.
“The whole amount was from funeral assurance business written by two (2) life assurers.”
For the financial year ended 31 December 2020, ten (10) out of twelve (12) life assurance companies and all four (4) composite reassurance companies reported capital positions which were in compliance with the prescribed minimum capital requirements of ZW$75 million and ZW$112.5 million respectively.
“Non-compliant players are encouraged recapitalise their companies so that they hold adequate capital.”
As at 31 December 2020, direct life assurers reported assets amounting to ZW$32.60 billion, indicating a growth of 50.78% from ZW$21.6 billion as at 30 September 2020.
Growth in assets was mainly attributable to increase in the value of fixed property and equity investments.
The asset base for composite reassurers grew by 20.28% from ZW$1.08 billion as at 30 September 2020 to ZW$1.23 billion as at 31 December 2020.
As at 31 December 2020, the average prescribed ratio for life assurers and life reassurers stood at 2.43% and 3.28% respectively.
All direct life assurance companies and life reassurance companies were non-compliant with the minimum prescribed asset ratio of 15%.
In terms of profitability the life assurance sector reported nominal profit after tax of ZW$11.35 billion for the year ended 31 December 2020, up from a profit of ZW$6.67 billion reported in the year ended 31 December 2019.
The after-tax profit for life reassurers in real terms grew by 296.31% from ZW$12.2 million reported for the year ended 31 December 2019 to ZW$35.28 million for the year ended 31 December 2020.
The increase in profit after tax for both the life assurance sector and the life reassurance sector is mainly attributable to high investment returns from revaluation gains on equity investments.