By Alois Vinga
THE risks of fire, personal accident and motor lines of business were the major drivers of business dominating the Short Term Insurance sector, Insurance and Pensions Commission (IPEC) latest report has revealed.
The document titled Short Term Insurance Report for the first quarter of 2023 reveals the three lines injected lucrative business in the sector.
“The short-term direct business, fire, personal accident and motor lines of business were the major sources of business for both the periods ending March 2023 and March 2022.
“The three (3) lines of business contributed a total of 65% of the combined Gross Premiums Written (GPW) for the quarter ended March 2023, up from 59% during the same period in 2022.
“While fire insurance was the major source of business for reinsurers, motor insurance was the major source of business for direct underwriters indicating that direct underwriters retained the major portion of motor insurance risk.
“As a result confirming that third-party motor insurance has remained the major source of business in the local market,” the report said.
During the period, the GPW written in absolute ZW$ by short-term reinsurers amounted to ZW$2,83 billion translating to 8% of the total business written in the quarter while the remaining 92% was written in foreign currency.
The composition of foreign currency denominated business and absolute ZW$ denominated business for short reinsurers suggest that direct short-term underwriters ceded more foreign currency denominated business than ZW$ denominated business.
“The total foreign currency denominated business written by short-term reinsurers increased by 51% from US$25,5 million reported during the quarter ending March 2022 to US$38.55 million during the comparative period in 2023,” said the report.
Old Mutual, Zimnat Lion, Nicoz Diamond, and Alliance dominated the market with a combined market share of 63% in terms of foreign currency-denominated GPW.
“The combined business written by short-term reinsurers increased by 724% from ZW$4,19 billion for the quarter ended 31 March 2022 to ZW$34.49 billion for the comparative period in 2023 in nominal terms,” the Report added.
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