Walter Muchinguri Assistant Business Editor
Significant increases in business written under accident insurance and bonds/guarantees helped non-life insurance companies to achieve a 2,92 percent increase in the volume of business written to $120,31 million for the half-year ended 30 June 2015 from $116,89 million during the corresponding period.
According to the latest non-life report for the period released by the Insurance and Pensions Commission, business written under accident insurance and bonds/guarantees increased by $4,52 million and $0,98 million respectively.
The growth in the volume of business during the half year period under review compares favourably with negative 0,79 percent reported in the comparative period in 2014.
The volume of business was generally on an upward trend since 2009 although the rate of growth in 2014 and 2015 was subdued compared to earlier years.
Motor and fire insurance remained the largest sources of business in terms of gross premium written accounting for a total of 62,14 percent of the total.
Total profit after tax for non-life insurers for the period however, fell 12,05 percent to $5,23 million from $5,95 million.
The decrease in total profit after tax was mainly attributable to an upsurge in net incurred claims coupled with increasing operational costs.
The number of registered players, including insurance agents, increased from 585 as at March 31, 2015 to 591 during the period under review.
Out of all the registered insurance companies, four (4) insurers namely Excellence Insurance Company, Cell Insurance Company, Tristar Insurance Company and Quality Insurance Company were not compliant with the minimum capital requirement of $1,5 million by June 30, 2015.
“Excellence Insurance Company was suspended from initiating and renewing insurance business at the time of compiling this report.
“The Commission urges all insurance companies to move towards compliance with minimum capital requirements that will be determined using Circular 1 of 2014 to avoid regulatory action which may have adverse effects on their operations,” ÏPEC said.
All the insurance companies, except Cell Insurance Company, reported solvency margins which were compliant with the regulatory minimum of 25 percent stipulated in section 24 of the Insurance Act.
“By implication, Cell Insurance Company was over-trading during the half year period under review.
“Over-trading ends up compromising underwriters’ ability to settle insurance claims in full timeously,” IPEC said.
The industry average solvency ratio for direct non-life insurers was 65,25 percent during the period compared to 68,38 percent reported in the period ended March 31, 2015.
Total assets amounted to $177 312 million during the period under review, reflecting an 8,44 percent decrease from $193,66 million reported during the previous quarter.
The decrease in total assets was mainly attributed to a decline in premium receivable from $47,14 million in the previous quarter to $36,53 million during the period under review.