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The life assurance industry net premium written in the quarter to March 31, 2015 increased 11 percent to $75 million compared to $68 million same quarter in 2014 due largely to growth in Nyaradzo, CBZ and the coming on board of Econet Life. According to the IPEC report for the first quarter, Nyaradzo business grew 26 percent in the quarter to $17,6 million from $13,96 million last year, Old Mutual was up a marginal 2 percent to $33,1 million and CBZ was up 37 percent to $3,07 million.

Fidelity Life also registered a 34 percent growth to $3,82 million while new baby Econet Life had NPW of $1,11 million in the first three months.

For the period under review, 79 percent of premiums which is equivalent to $58 million of the total net business was attributable to the top three companies, Old Mutual, Nyaradzo and FML.

In terms of business composition for the period, life companies wrote $74 million in gross premiums compared to 2014 quarter of $67 million .

Of this figure, $67 million or 90 percent, was reportedly made up of recurring business at while $8 million was new business.

Employee benefits products contributed 60 percent at $45 million of the business with the balance being individual lines.

“This suggests a decline in group business compared to individual clients partly due to the increase of the informal sector which is typically proprietor-managed,” says IPEC.

IPEC said the current economic landscape is predominantly made up of the informal sector, inevitably, the industry should reconfigure its products in sympathy with this reality.

In the period, fund business contributed $31 million, group life assurance policies $10 million and funeral business at $26 million of total gross premiums.

Accordingly, the mentioned products constituted 89 percent of gross premium written.

According to the report, the industry’s total claims bill grew by 15 percent versus the net premium growth rate of 11 percent reflecting an unfavourable claims experience given depressed investment outlook.

Life companies paid $33 million in net claims for the period while the major claim types were surrenders at 31 percent, maturity 22 percent and death 35 percent. The life assurance companies recorded a debtor’s book worth $8 million and IPEC says given the gross premium figure for the quarter of $67 million this implies that the average premium collection rate was 88 percent.

“This is considered reasonable in light of the liquidity challenges prevailing in the economy.”

For the current review period, management costs accounted for 27 percent at $14 million of total costs compared to March 2014 level of $13million.

“Claims were at $33 million whilst the commission bill was 9 percent at $4 million.”

The bulk of the investment assets were in real estate at $541 million, equities at $462 million, money market at $255 million, cash assets $13 million, other assets at $264 million and $56 million on prescribed assets.

IPEC said the industry must take solid steps to comply with investment guidelines effective 2016 as well as actuarial recommendations – Wires.