Breaking News

'GDP rebasing to lower insurance penetration'

by Staff reporter
22 February 2019 | 135 Views
THE rebasing of Zimbabwe's gross domestic product (GDP) in 2018 will lower insurance penetration rate by 2,9%, an industry official has said.

Insurance and Pensions Commission (Ipec) acting commissioner Blessmore Kazengura on Tuesday told a financial inclusion workshop in Harare that excluding the National Social Security Authority (Nssa) and medical insurance, insurance penetration stood at 4,7% as of December 2017, a figure lower than that of southern Africa countries.

He said low confidence continues crippling the insurance sector after thousands lost their savings during the hyperinflation of 2008.

"This, coupled with current challenges affecting the economy, continues to impact on consumer confidence regarding insurance companies and insurance and pensions products. We believe that any amount that will go towards compensation will address the low confidence levels," he said.

The penetration rate is expected to reach 20% by 2020.

The penetration rate rose from low levels of 1,9 % in 2018 to 4,7% in 2017 as insurers leveraged on financial inclusion.

Government rebased the economy and subsequent changes of GDP, a move that saw numbers moving upwards from $16,6 billion to $20,5 billion.

Kazengura said the commission would continue to monitor capital levels of insurance companies to ensure that they have underwriting capacity, hence the ability to meet claims.




A number of insurance companies have been struggling to meet their capital requirements.

However, Finance minister Mthuli Ncube last year reviewed upwards the minimum prescribed asset thresholds for the insurance and pension industry which were introduced in 2010 in order to improve resource mobilisation to support key national projects.

The minimum prescribed asset thresholds for both short-term non-life insurers and reinsurers have been doubled from 5% to 10%.

Life assurers will be doubled from 7,5% to 15% while funeral assurers will increase from 7,5% to 10%.

The minimum prescribed asset threshold for pension funds was increased from 10% to 20% and they are all expected to comply by December 31 2019.

During the period, Kazengura said, distribution costs and admin costs remained high, resulting in high pricing of insurance products.

The registration of innovative insurers like Econet is expected to increase competition in the industry, and this is expected to drive down distribution costs and potentially lower prices of insurance products.

GDP Rebase Mthuli

Source: the independent

Comments

Latest News

Rocks from mountain crush huts in Zimbabwe

by City Press | 24 March 2019 | 2286 Views

'Tax reforms to rescue debt-distressed Zimbabwe'

by Staff reporter | 24 March 2019 | 661 Views

Afreximbank grants Zimbabwe interbank forex trade loan

by Staff reporter | 24 March 2019 | 739 Views

Zimbabwe volcano fears - The Civil Protection Department (CPD) in Masv...

by Staff reporter | 24 March 2019 | 2872 Views

Mnangagwa goes Biblical: 'Zimbabwe accepts will of God'

by Staff reporter | 24 March 2019 | 1055 Views

Open letter to President Mnangagwa

by Viniel Deredza | 24 March 2019 | 881 Views

Warriors ease into Afcon finals

by SuperSport | 24 March 2019 | 569 Views

Rights Commission finalising probe into Zimbabwe army crackdown - THE ...

by Staff reporter | 24 March 2019 | 157 Views

3 lawyers banned from practising - THREE lawyers have been banned from...

by Staff reporter | 24 March 2019 | 598 Views

Jabulani Sibanda to bounce back?

by Staff reporter | 24 March 2019 | 920 Views

Questions over Mnangagwa's choice of advisors - ON three occasions, Pr...

by Staff reporter | 24 March 2019 | 245 Views

Potraz board okays tariff increases

by Staff reporter | 24 March 2019 | 217 Views

Horror Cyclone destruction trail unravels - THE human toll of Cyclone ...

by Staff reporter | 24 March 2019 | 137 Views

LIVE: Zimbabwe vs Congo Brazzaville

by Staff reporter | 24 March 2019 | 3497 Views

Zimbabwe debt should be audited - ZIMBABWE should not rush to pay its ...

by John Kachembere | 24 March 2019 | 811 Views

Zimbabwean couple hijacked in Durban, wife missing since Monday - A Zi...

by Staff reporter | 24 March 2019 | 3740 Views

Mnangagwa's days numbered

by Staff repo | 24 March 2019 | 8051 Views

Zimbabwean man dies during sex with SA mistress - A  67- year-old...

by Staff reporter | 24 March 2019 | 3622 Views

Zimbabwean company donates laptops to needy SA varsity students - Zoro...

by African News Agency (ANA) | 24 March 2019 | 1039 Views

Gweru prophet sets up school of spiritual gifts - Gweru-born Prophet G...

by Staff reporter | 24 March 2019 | 489 Views

Potraz brings toll free platforms to rural folk

by Staff reporter | 24 March 2019 | 162 Views

Mnangagwa pledges support for Gukurahundi victims

by Staff reporter | 24 March 2019 | 411 Views

Zimbabwe banks must support the interbank trading - THE interbank mark...

by Andrew Lampard | 24 March 2019 | 262 Views

Robbing the poor in the name of patriotism - The post-Robert Mugabe ad...

by Tawanda Majoni | 24 March 2019 | 221 Views

'Using Air Zimbabwe will pose logistical problems for Mnangagwa' - Dep...

by Staff reporter | 24 March 2019 | 417 Views

Entertainment

Andy Muridzo promises new album

by Simbarashe Sithole | 18 March 2019 | 308 Views

Kwejani band is back! - AFTER an eight-year hiatus, Victoria Falls' su...

by Staff reporter | 13 March 2019 | 1189 Views

Moyo revives Pantsula genre

by Staff reporter | 10 March 2019 | 464 Views

Majaivana's sad farewell

by Bruce Ndlovu | 10 March 2019 | 6757 Views

Nceku shifts base to SA

by Staff reporter | 09 March 2019 | 827 Views

Baba Harare abandoned by band members - Jit musician, Baba Harare has ...

by Staff reporter | 04 March 2019 | 2050 Views

Winky D pays the price

by Staff reporter | 03 March 2019 | 5517 Views