ZSE spurs life assets

ZSE spurs life assets
Published: 28 June 2018
POSITIVE performance on the Zimbabwe Stock Exchange (ZSE) has spurred asset bases of local life assurance companies, as the sector closed the first quarter with an asset base of $2,82 billion, it has emerged.

Insurance and Pensions Commission (IPEC) pensions manager Nhau Chivingira last week said life assurers - who mostly invest in markets on behalf of their clients - saw a surge in asset base following the ZSE's bullrun last year.

"The ZSE bullrun drove asset bases with the assurers closing 2017 with an asset base of $2,5 billion. While they closed the first quarter with $2,82 billion, this is in comparison to non-life players who have an asset base ranging from $200 to $300 million," Chivingira told reporters in the capital at a media workshop organised by IPEC and Zimselector.

This comes as in the period to September 2017, the life assurance sector recorded a 311 percent surge in equities investments from $348 476 to $1,5 million spurred by the ZSE bullrun.

Data from IPEC indicates that life assurers favoured equities during the period under review as they offloaded fixed property investments – which constituted $493 387 of total investments during the period, down from $560 414 – while money market values marginally increased.

Driving the equities investments by life assurers was a 460 percent surge in the total value of shares traded on the ZSE during the third quarter of 2017 as the bourse's industrial index firmed 113,5 percent.

Old Mutual Securities attributed this growth in trades to an increasing share of investors moving away from near cash assets into the equities as currency concerns and growing money supply from expansionary fiscal activities bolstered equity trades.

During the third quarter of 2017, the life sector invested in fixed property, equities, money markets, cash, prescribed assets and other investments.

Meanwhile, the majority of life assurance institutions have now managed to comply with the minimum capital requirements and prescribed asset status with the remaining non-compliant assurers instituting various measures towards compliance.

"The life assurance industry was made up of 1 594 agents, 11 direct life assurance companies, four composite reassurance companies and 1 life reassurer as at 30 September 2017," IPEC said.

During the period under review the aggregate Zimbabwe life assurance industry gross premiums written totalled $272 million as life assurers accounted for $266 million, an increase of four percent over the 257 million written during the previous reporting period.

Reassurers accounted for U$5,9 million, an increase of one percent over $5,9 million in premiums written during the previous comparative quarter.

"The life assurance sector's average prudential liquidity ratio was 433 percent as at 30 September 2017. The ratio implies that the industry has sufficient assets to meet claims when they fall due.

"The industry also recorded a capital to liability ratio of 181 percent in the current reporting period giving a growth of 113 percent largely as a result of the increase in money markets," the regulator said.

- fingaz
Tags: ZSE,


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