Profit after tax for direct insurance companies for the period ending June 30, 2017 increased 61 percent to $11,12 million from $6,88 million during the same period last year.
This was driven by high net premium written and low management expenses.
Total gross premium written (GPW) for non-life insurers for the period to June 30, 2017 rose 9 percent to $124,9 million compared to $114, 3 million during the same period last year driven by strong business generated from fire, hire purchase and motor insurance.
According to the latest Insurance and Pensions Commission (IPEC) short term non-life insurance report for the half-year to June 30, 2017 motor, fire and miscellaneous accident insurance were the main sources of business for the sector accounting for 66 percent of total GPW for the period under review, with motor vehicles being the highest at $56, 5 million.
Meanwhile the reported a profit after tax for non-life re-insurers marginally increased to $4,98 million from $4,72 million as compared to the same period last year driven by the upsurge in net written premium.
Insurance brokers generated $48,26 million for the quarter to June 30, 2017 which was 3, 73 percent lower than the $50,13 million written during the same period last year.
While non-life insurance companies made profits the commissioner is concerned with the high percent of assets in premium debts.
“The Commission is concerned with total assets of 31, 46 percent being concentrated on premium debtors and fixed assets. It is important for insurers to structure their investments in a manner that would respond to their obligations,” said IPEC.
In terms of capitalisation, 11 out of 20 insurers were compliant with the new minimum capital requirement of $2,5 million. This follows the promulgation of Statutory Instrument 95 of 2017 which set minimum capital requirement for non-life insurers of $2,5 million.
“However, the reported capital positions do not account for non-admissible assets as stipulated in Statutory Instrument 95 of 2017, which is also a guidance on the computation of capital for insurance companies and reinsurance companies. IPEC is reviewing the situation and the relevant policy pronouncements are expected before year end,” said IPEC.
By close of the period, the sector had 577 registered players inclusive of insurance agents and loss adjusters, a decrease from 588 in the prior year comparable period.