Mishma Chakanyuka, Staff Writer 
THE Insurance and Pensions Commission (Ipec) has urged life assurers to continuously strengthen their balance sheets to withstand exogenous shocks.
In its latest report on the sub-sector, Ipec has implored companies to comply with all regulatory requirements “on an ongoing basis”.
The commission noted that the need to transition to IFRS 17 reporting, a risk-based capital regime, and timely filing of returns cannot be overemphasised.
During the period under review, the sector’s gross premium written rose by 175,8 percent compared to the same period last year driven by premium adjustments in line with rising inflation and new business, though on a small scale.
“Recurring premiums and new business written increased in nominal terms by 463 percent and 558 percent, respectively, as compared to the same period in 2022,” Ipec said.
IPEC commissioner, Gace Muradzikwa
During the half year, the sector was made up of 12 direct life assurance companies, four reassurance companies and 1,425 life agents.
The life assurance sector reported foreign currency business amounting to US$23 million, translating to a growth of 155,6 percent from the US$9 million recorded in the second quarter of 2022.
The funeral assurance business was the major contributor, with Nyaradzo Life Assurance Company writing 40 percent of the business in foreign currency.
The life reassurance sector recorded foreign currency business amounting to US$1,7 million during the period under review.
Inflation-adjusted profit after tax for life assurers increased by 828 percent from $38,5 billion to $357 billion for the period under review, while profit after tax for life reassurers increased by 377 percent from $582,3 million to $2,8 billion.
“The increase in profit after tax for life assurers was mainly driven by high investment returns from revaluation gains on investment properties and adjustment in premiums in line with inflation,” Ipec said.
“During the quarter under review, the actual claims paid only accounted for 29 percent of the net premium written, which also contributed to the increase in profit after tax.”
All the 11 life assurance companies that submitted their returns and all four life reassurance companies reported capital positions that were compliant with the prescribed minimum capital requirements (MCR) of $75 million and $112,5 million under statutory instrument 95 of 2017, respectively.
However, they are awaiting the gazetting of new minimum capital requirements and all entities are expected to meet the new regulatory MCRs, as well as have systems in place to comply with the risk-based solvency regime under the ZICARP framework.
Ipec noted that direct life assurers reported a 401,21 percent nominal growth in total assets from $450,9 billion as at March 31, 2022 to $2,3 trillion as at June 30, 2023, mainly driven by revaluation gains from investment properties.
The asset base for life reassurers grew by 514 percent from $7 billion in March to $43 billion at the end of June 2023 with the increase being mainly on account of revaluation gains.
The average prescribed assets compliance ratio for life assurers and life reassurers for the period stood at 9,27 percent and 3,48 percent respectively.
Only four direct life assurers and one life reassurer were compliant with the minimum prescribed threshold of 15 percent as at June 30, 2023.
“Insurers are required to consider all the instruments in the market that have been accorded prescribed asset status to ensure that compliance is met,” Ipec said.
Going forward, the commission said it would continue to monitor industry quarterly submissions for improvements in ML/TF control measures being implemented considering the ML/TF risks an entity is exposed to.
