ZIMBABWEAN reassurance companies have underwritten $4 million in net premiums for the half quarter ended September 30 2013 up from $3,8 million in 2012, according to the Insurance and Pensions Commission (Ipec) third quarter report.
Reassurance is the contract made between an insurance company and a third party to protect the insurance company from losses.
The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract.
The reinsurer is the third party or the company issuing the reinsurance policy.
The Ipec report is based on two life reassurers, Baobab and First Mutual.
According to Ipec, in the period under review, gross premium written increased by 17% to $5,3 million as compared to
$4,5 million in 2012.
Net claims incurred grew by 98% to $2 million from $1 million in 2012.
Net commission incurred increased by 107% to $1,2 million for the half quarter ended September 30 2013 as compared to $587 000 in 2012.
“For the current review period, costs grew by 66% while net premium inflows rose by 17% to $3,8 million. This imbalance resulted in a $68 000 underwriting loss. The combined ratio was 102%,a 33% increase from the same period last year,” the report read.
In the period under review, management expenses grew by 8% to $1 million from $995 000 in 2012, and underwriting profit declined by 94% to $68 000 from $1,1 million in 2012.
Ipec said both reassurers were fully compliant with the new minimum capital requirements in line with Statutory Instrument 21 of 2013.
According to the report, the bulk of the assets were held in equities (45%), money (29%) and 16% which was invested in other investments.
“Players must be guided by actuarial input and statutory guidelines in order to achieve the right asset/liability mix,” Ipec said.
In the period under review, Baobab Life and Health held 70% of the market share with the FM Re-Life and Health getting the balance.