Giving an overview of the full year operating environment Muradzikwa noted with concern the impact of the obtaining liquidity crisis in the country.
One notable challenge the insurance industry faced was the client’s inability to pay full premiums on time leading to staggered payment structures to the disadvantage of the insurers.
"We noticed that in 2011 claims have increased in both frequency and severity" remarked Muradzikwa
"Clients are still negotiating for payment plans and we can’t sweat the premiums enough when they are coming in in dribs and drabs" said the MD.
She noted that the industry has been experiencing premium collection challenges due to these liquidity constraints. Muradzikwa bemoaned the challenges that the insurance sector was also facing due to the inefficiencies that are currently being witnessed in the financial series sector particularly banking.
"We have had problems with clients who have gone for almost 2 months without receiving their claim settlements after we would have processed the claims and we will be having evidence that we have settled the claim and the bank will not be having the ability to settle."
"We are lacking a properly functioning banking sector" she added.
Worth noting is the fact that there has been an increase in the uptake of insurance though the cover is still minimal.
Muradzikwa told the briefing that this situation provided the insurance sector with an opportunity for growth should things improve and cover increases.
Giving an update on the current year, Muradzikwa said premiums as of 22 March 2012 totalled $6.273 million, which was a 22% growth on the $4.893 million achieved in the same period last year.
"We are seeing a steady firming of insurance rates and we think it’s a response to regulation and the market is now charging economic rates."
"Rates are slowly edging towards the 5% mark for motor insurance though rates in the region of 1.5-2.5% are still present on the motor class," said Muradzikwa as she gave an update on the insurance rate developments.
Competition remains a challenge for the insurance industry with approximately 29 active players of which Muradzikwa believes for its size the local insurance industry is seriously overtraded.
The non-life insurance industry has shown resilience according to Muradzikwa, total sum insured rebounded significantly in F11 jumping 33% from the F10 to $160 million after shrinking during the Zim dollar era from an all-time high of a total sum insured of $600 millio .
"There is huge potential for the Zim market to return to the $600 million level considering how much it has grown since dollarisation" she said.Post published in: Business