- Profit after tax increased by 576%
- Unrealised gains settled at 562.08
- Total assets up by 31.19%
Harare-Short term non-life insurers reported a total profit after tax of ZW$2.43 billion for the year ended 31 December 2020, representing a 576 percent nominal increase from ZW$359.52 million reported in the comparative period in 2019.
The significant increase was mainly driven by the surge in GPW and unrealised gains of 562.08 percent and 819.89 percent respectively. There was a slight movement in the combined ratio for the short-term insurers from 91.03 percent for the year ended 31 December 2019 to 91.18 percent for the period under review
According to the report, total gross premium written (GPW) by non-life insurers stood at ZW$9.11 billion reflecting a 562.40 percent increase from the ZW$1.37 billion reported in the prior comparative period due to the consistent trends in the Zim dollar denominated business classes as well as fire and motor insurance business classes.
Total assets for short-term insurers increased by 31.19% in nominal terms from ZW$6.76 billion reported as at 30 September 2020 to ZW$8.87 billion reported as at 31 December 2020. The increase in assets is mainly attributable to an increase in premium debtors.
Premium debtors rose significantly from ZW$1.52 billion reported as at 30 September 2020 to ZW$2.49 billion for the twelve months ended 31 December 2020, reflecting an increase of 63.13 percent continued increase in premium debtors is a sign of weak credit risk management by the sector.
Furthermore investments in prescribed assets increased by 9.50 percent from ZW$287.76 million as at 30 September 2020 to ZW$315.10 million as at 31 December 2020.
However the short-term insurance industry reported a slight decrease of 0.65% in total technical liabilities from ZW$1.55 billion as at 30 September 2020 to ZW$1.54 billion as at 31 December 2020 which came in as a result of the unexpected cash needs without the sale of investments.
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