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Business Reporter
THE Insurance and Pensions Commission (Ipec) has deregistered three non-life insurance companies for failure to meet approved minimum capital threshold of $1,5 million.
The deregistered entities are KFMS Insurance Company, Heritage Insurance and Excellence Insurance.
This brings the number of non-life insurers to 20 from 23 in the last quarter.
In 2013, Ipec doubled the minimum capital requirements for the sector with short-term insurers required to achieve a minimum capital level of $1,5 million and life assurers having to put up $2 million.
“It is hereby noticed that in terms of section 23 of the Insurance Act (Chapter 24:07), the following insurance companies have had their certificates of registration cancelled: KFMS Insurance Company, Heritage Insurance Company of Zimbabwe and Excellence Insurance Company,” Ipec Commissioner Mrs Manette Mpofu said.
Zimbabwe’s direct non-life insurance industry has been witnessing a decline in the volume of business.
The volume of business written by non-life insurers in terms of total gross premium written (GPW) dropped five percent from $120,31 million for the half year ended June 30, 2015 to $114,33 million for the half year ended June 30, 2016. According to Statutory Instrument 23 of 2016, registration and application fees to be paid by life assurance firms, insurance brokers and reinsurance companies now stand at a total of $5 500.
The development comes at a time when some players had been deregistered due to weak capital positions and the trend continues.
Experts say the performance of the insurance and pension sector has largely remained depressed owing to low economic activity, legacy issues emanating from the conversion of insurance and pension policies from Zimbabwe dollar to US dollar values and liquidity challenges, among others.
In his 2016 national budget presentation, Finance and Economic Minister Patrick Chinamasa hinted on plans to increase the minimum capital requirements for the sector by December this year to improve the underwriting capacity of firms.
In the regulator’s report as at June 30, 2016 all, save three of the operating non-life insurance companies, reported capital positions, which were above $1,5 million.
Total gross premiums written increased by 11,6 percent from $264 million, to $295 million for the first six months ending June 30 2015 compared with the same period in 2014.
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