daniel chigunwe
Zimbabwe’s life assurance sector saw US$42,94 million in foreign currency revenue during the first half of 2024, representing 68 percent of total revenue, according to the Insurance and Pensions Commission’s (IPEC) second quarter report.
The report highlights the dominance of Nyaradzo Life and Doves Life in revenue share, as well as the need for product diversification and innovation within the sector.
In terms of sector revenue, Nyaradzo Life and Doves Life are leading the life sector with a total market share of 56,2 percent, with the rest of the players sharing the remaining 43,8 percent of the market.
IPEC in the report said in order to support business growth, the industry should focus on creating products that align with
the current business environment and evolving consumer preferences, among other factors.
“The need to diversify product concentration risk cannot be overemphasised,” reads the report.
In terms of assets, three entities dominate the market, with 72,58 percent of the life assurance sector, while the remaining entities hold the remainder of 27,42 percent.
Old Mutual has the biggest share of the market in terms of assets.
IPEC said life assurance companies are encouraged to maintain assets with appropriate duration and liquidity profiles that align with their liabilities, ensuring they can meet obligations as they arise.
In terms of Zimbabwe Gold currency (ZIG), direct life assurers reported insurance revenue of ZIG 850,72 million, equivalent to US$63,09 million based on the average exchange rate for the period.
Funeral assurance and group life assurance business remain the two major drivers of insurance revenue for the life sector, which constituted a combined share of 86,04 percent of the total revenue.
Nyaradzo Life Assurance Company dominates the life sector, holding 41 percent of the market share, primarily due to its funeral assurance business.
The report shows that the top five companies collectively generated ZiG$689,90 million in revenue, equivalent to US$51,17 million based on the average interbank rate for the period.
In terms of insurance revenue by product, funeral assurance is the primary product in the life sector, contributing 69,36 percent of total revenue.
“This is followed by group life assurance, which accounts for 16,67 percent of total revenue. Other life products, including endowment, term assurance, and whole life, accounted for only 7,48 percent of the business.
IPEC said restoring confidence remains a central focus for the Commission, which is collaborating with the industry to revive interest in other long-term products.
“The industry must innovate to create products that meet market needs,” said the Commission. — BH24
Bongani Ndlovu