Funeral Assurance sector US$ business up 638% – NewZimbabwe.com

By Alois Vinga

THE Funeral Assurance sector has seen the growth of the US$-denominated business increasing by 638% with the South African Rand segment even rising much faster in just three months, the Insurance and Pensions Commission (IPEC) recent report has established.

The developments come on the back of a general increase in foreign currency related business in the country, which according to the Reserve Bank of Zimbabwe data now accounts for almost 70% of local transactions.

Accordingly, the Funeral Assurance Industry Report for the first quarter of 2023 shows the levels of foreign currency business generated is consistent with broad economic transaction dynamics.

“For the foreign currency business, the sector recorded a total gross premium amounting to US$497,298 and ZAR179,104.

“Gross Premiums Written (GPW) for US$  denominated business increased by 638,28% from US$67,359 while the South African Rand GPW increased by 4,600.90% from ZAR3,810 recorded during the comparable period in 2022,” the report said.

As at 31 March 2023, seven (7) out of the eight (8) Funeral Assurers were compliant with the Minimum Capital Requirement (MCR) of ZW$62,50 million, as prescribed in Statutory Instrument 59 of 2020.

During the period, total assets for the funeral assurance sector increased by 37% from ZW$6,10 billion as at 31 December 2022 to ZW$8,36 billion as at 31 March 2023. The increase in the asset base was partly due to inflation-driven revaluation gains on asset values.

All Funeral Assurers were non-compliant with the minimum Prescribed Asset requirements as at 31 March 2023 with an average Prescribed Asset ratio of 0.21% against the required ratio of 10%, as stipulated by Statutory Instrument 206 of 2019.

“The Commission is concerned by the continued non-compliance levels with prescribed asset requirements. All eight (8) players are yet to develop and submit roadmaps in line with SI 206 of 2019. The Commission will be escalating measures to cause compliance,” added the report.