{"id":435873,"date":"2011-06-03T14:08:21","date_gmt":"2011-06-03T14:08:21","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/06\/03\/insurance-penetration-ratio-remains-low\/"},"modified":"2011-06-03T14:08:21","modified_gmt":"2011-06-03T14:08:21","slug":"insurance-penetration-ratio-remains-low","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/06\/03\/insurance-penetration-ratio-remains-low\/","title":{"rendered":"Insurance Penetration Ratio Remains Low"},"content":{"rendered":"
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\"Zimbabwe<\/a><\/p>\n

Paul Nyakazeya<\/p>\n

30 May 2011<\/p>\n

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THE insurance penetration ratio in Zimbabwe has remained low with a premium written at 4% of Gross Domestic Product as at December 31, Finance minister Tendai Biti said officially opening the African Insurance Organisation conference in Victoria falls this week.<\/p>\n

Biti said the insurance penetration ratios were low due to macroeconomic instability, natural disasters, political instability, regulatory weakness and poor corporate governance, which were also affecting other African countries.<\/p>\n

“Despite all these setbacks Zimbabwe remains committed to improve the penetration ratios by maintaining the current sound macroeconomic and stable political environment to ensure sustainable economic growth and improved penetration ratios,” Biti said.<\/p>\n

The average global penetration rate for the insurance market is at 7,5%, with England as the global leader at 16,5%, trailed by South Africa at 16% and Taiwan at 14,5%.Biti said as of December 31 last year, the short term insurance industry had an asset base of US$164 million while the long term insurance industry had US$934 million.<\/p>\n

“Short term capitalisation as at December 31 2010 was at US$90 million,” Biti said. Like most forms of business, insurance thrives in an environment of relative economic stability. Over the past decade, the role of the Zimbabwean insurance industry was undermined by economic turmoil, particularly hyperinflation.<\/p>\n

However, since the adoption of the use of multi currencies , insurance companies have tended to be hardest hit by an illiquid market. The operating environment has been difficult for both short term and long term insurance. Companies are scrambling for a swiftly dwindling cake as many former investors are shunning Zimbabwe, primarily due to the liquidity crunch in the country and because of its prohibitive costs.<\/p>\n

However, in the same period, the largest listed insurance companies, Fidelity Life Assurance and NicozDiamond have reported favourable results, reflecting the improved performance of the insurance industry in general.<\/p>\n

Fidelity Life Assurance’s premium income more than doubled to US$7,7 million, while benefits, claims and expenses also doubled to US$5,7 millionThe Fidelity Life Group posted a profit of US$2,9 million from continuing operations, a 17% improvement from the previous period.<\/p>\n

Total attributable profit stood at US$3,35 million, representing a growth of 77 percent in the same period.<\/p>\n

Short-term insurer NicozDiamond’s gross premium levels rose 54% to US$18,6 million in the financial year to December 31.The short term insurer suffered a loss before tax of US$842 754, after operating expenses of US$5,5 million and nearly US$7 million worth of costs from claims and acquisitions. During the period, NicozDiamond’s investment income declined to US$14 113 compared with US$1,7 million in the prior year. The other challenge for Nicoz Diamond and other short term insurers alike is that a significant chunk of their business is motor and fire insurance.<\/p>\n

Nicoz motor insurance business is 50% whilst fire is at 25%.<\/p>\n

Motor insurance’s breadth of cover is limited, as most clients opt for third party cover as opposed to comprehensive cover, which results in lower premiums. At the same time, the business classes’ contribution to claims is higher.<\/p>\n

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Continued here:
\nInsurance Penetration Ratio Remains Low<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Paul Nyakazeya 30 May 2011 THE insurance penetration ratio in Zimbabwe has remained low with a premium written at 4% of Gross Domestic Product as at December 31, Finance minister Tendai Biti said officially opening the African Insurance Organisation conference in Victoria falls this week. Biti said the insurance penetration ratios were low due to macroeconomic instability, natural disasters, political instability, regulatory weakness and poor corporate governance, which were also affecting other African countries. <\/p>\n","protected":false},"author":0,"featured_media":405302,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-435873","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-local-news"},"yoast_head":"\nInsurance Penetration Ratio Remains Low - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/06\/03\/insurance-penetration-ratio-remains-low\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Insurance Penetration Ratio Remains Low - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Paul Nyakazeya 30 May 2011 THE insurance penetration ratio in Zimbabwe has remained low with a premium written at 4% of Gross Domestic Product as at December 31, Finance minister Tendai Biti said officially opening the African Insurance Organisation conference in Victoria falls this week. 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