Insurance firms struggle to meet requirements

Insurance Zimbabwe

HARARE ­ Credit Insurance Zimbabwe (Credsure) and Sanctuary Insurance Company
(Sanctuary), have failed to meet the $1,5 million minimum threshold during the first half of this year
due to deteriorating economic conditions, an Insurance and Pensions Commission (Ipec) report
has shown.
This comes as 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 United States dollar values and liquidity challenges,
among others.
In its report for the six months to June 2016, Ipec said Credsure had a $1,3 million capital position
as Sanctuary’s capitalisation stood at $1,4 million against the $1,5 million requirement.
“All non­life insurance companies reported solvency margins which were above the regulatory
minimum of 25 percent with an industry average solvency margin of 74,74 percent as at June 30,
2016,” the insurance regulator said.
This comes as Finance minister Patrick Chinamasa in his 2015 National Budget announced an
upward review of the minimum capital requirements for the insurance sector to improve
underwriting capacity and contain insurance business within the country.
The treasury chief hiked the minimum threshold for short term insurers from $1,5 million to $2,5
million, from $2 million to $5 million for life assurers and pegged the minimum capital requirement
for funeral assurers at $2,5 million from $1,5 million.
However, the proposed hike is to be effected by December 31, 2016.
Ipec has already put in place a micro­insurance framework to downgrade all insurers failing to meet
their respective minimum capital thresholds. – Daily News

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