NON-LIFE insurance companies registered 250 percent growth in profits to $33,6 million in the 12 months to December 2017, according to Insurance and Pensions Commission (IPEC)’s 2017 fourth quarter report. Total profit was reported at $13,40 million in the comparative period in 2016.
The key driver was increase in gross premium written (GPW) and investment income, which grew by 9,49 percent and 47,60 percent respectively.
GPW by non-life insurers amounted to $236,47 million for the 12 months, which ended on December 31, 2017 reflecting a 9,49 percent increase from $215,97 million reported for the comparative period in 2016.
“The industry average return on assets (ROA) and return on equity (ROE) improved sharply from 7,06 percent and 15,35 percent in the comparative period last year to 15,38 percent and 30,84 percent for the period under review.”
Largely buoyed by the bull run in the stock market, total assets for non-life insurers grew from $197,43 million as at December 31, 2016 to $235,42 million.
“Insurers are required to abide by our investment guidelines in order to sustain their capacity to liquidate their contractual obligations on time,” IPEC said.
The industry average prescribed assets ratio for the non-life insurance companies as at December 31, 2017 was 10,02 percent, which was largely compliant with the regulatory minimum requirement of 5 percent.
The insurance commission said it had engaged the non-compliant players with a view to enforce consistency with Statutory Instrument 26 of 2016.
IPEC said total cash and near cash assets in the form of money market and short term prescribed assets decreased from $70,03 million as at December 31, 2016 to $65,48 million recorded in the same period under review.
This is evidenced by a marginal decrease in the acid test ratio from 80,37 percent to 65,67 percent for the 12 months ended December 31, 2017.
Such a movement was mainly caused by significant reduction in money market investments from $30,70 million as at December 31, 2016 to $20,56 million as at December 31, 2017.
The non-life insurance industry reported an increase in total technical liabilities from $55,38 million as at December 31, 2016 to $68,03 million as at December 31, 2017.
The industry was considered to have adequate liquid assets to match its total technical liabilities as shown by the industry average liquid assets to total technical reserves of 111,35 percent as at December 2017, despite declining from 126,47 percent reported as at December 31, 2016.
During the period, 16 out of 20 insurers were compliant with the minimum capital level of $2,5 million.
The reported capital positions were computed without accounting for the dictates of Statutory Instrument 95 of 2017, which deals with non-admissible assets.
In the period under review insurance brokers wrote $97,2 million in premium income. The business written by insurance brokers was 7,96 percent higher than the $90,06 million reported for the year to December 2016.
Insurance brokers recorded $14,36 million net brokerage commission since January 1, 2017. Compared to the same period in 2016, this was a decrease of 6,44 percent from $15,34 million reported in 2016, IPEC said.
The volume of business written by non-life re-insurers grew by 7,86 percent from $99,93 million reported in the comparative period last year to the current $107,86 million, which has largely been attributable to improved use of ICT systems in the collection of motor insurance premiums.
Reinsurance brokers reported $74,31 million in gross premium written for the year ended December 31, 2017 reflecting a decrease of 8,44 percent from the $81,16 million reported for the year ended December 31, 2016.