Insurance industry expected to grow

THE insurance business in Zimbabwe is expected to boom next year with players in the industry saying peaceful elections are expected to improve confidence in the sector.

Gamma Mudarikiri
Own Correspondent

Insurance and Pensions Commission (Ipec) head of prudential supervision, Pupurai Togarepi told Southern Eye that insurance business was buoyant after elections, adding that as a result, most players had complied with the $3 million minimum capital requirement with only four months left before the December deadline.

Ipec last year increased minimum capital thresholds by nearly threefold to a maximum of $3 million.

Before elections players in the sector had indicated that uncertainty surrounding the polls was slowing business down raising fears that the sector might again crumble.

Player in the sector had adopted a wait and see election pending the holding of the election.

But Togarepi said the sector was bubbling with confidence following a largely peaceful election that President Robert Mugabe won.

“We are optimistic that the insurance business will improve especially next year — with holding of a peaceful election which has improved confidence in the sector,” said Togarepi.

He said the restoration of confidence in the insurance industry is under scrutiny after the realisation that several firms and households were shunning investments in the sector, citing alleged failure by some companies to pay claims.

Togarepi, however, said business in the insurance sector was improving with most of the players expected to comply with the deadline for minimum capital requirements.

According to Ipec, as of June, between 95% and 98% of insurance companies had complied with the minimum capital requirements and the majority had already surpassed the $300 000 threshold.

The insurance regulator last year increased the minimum capital threshold for insurance companies to a maximum of $3 million from $300 000.

Minimum capital requirements for reinsurance companies were raised to $3 million up from $400 000, while the same requirements for short-term insurance firms were hiked to $2 million.

Funeral assurers minimum capital requirements for funeral assurance were increased to $3 million from $500 000.

Last year Ipec proposed mandatory publication of financial statements by all insurance companies, a development the regulator said would enhance transparency and accountability in the sector.

The regulator was blaming players for limited disclosure on core financial statements and notes, saying this compromised transparency.
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