Insurance Industry in Zambia _ Performance & Regulatory
Overview
AVANI, Livingstone
12 June 2018
6/12/2018 1Pensions & Insurance Authority
Outline
• Financial Performance – 2017
• Regulatory Reforms
– Prudential regulations (solvency & governance)
– Conduct of business ( fair treatment of policyholders)
– Industry Development & Financial inclusion
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Financial Performance
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5.71%
12.86%14.23%
18.06%
11.16%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
2013 2014 2015 2016 2017
GI _ GWP
Gross Premiums GI GWP rate p.a
Financial Performance
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37%
9%
29%
25%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
900,000,000
1,000,000,000
2013 2014 2015 2016 2017
LIFE - GWP
Life _ GWP GWP rate P.a
Financial Performance
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4.05%4.53%
0.16%
-3.22%
6.19%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
2013 2014 2015 2016 2017
GI_Underwriting Margins
Financial Performance
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25%27%
30%
35%
24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2013 2014 2015 2016 2017
GI loss ratios ( Gross Claims to GWP)
Financial Performance
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31%
37%
43%46%
41%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2013 2014 2015 2016 2017
Life- Loss Ratio
Financial Performance
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1,014,203,665 1,116,499,004
1,330,607,460 1,514,623,410
1,818,553,227
151,020,987 110,126,938 162,573,734 149,173,992 292,823,550
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
2013 2014 2015 2016 2017
GI _ ASSETS & CAPITAL
TOTAL ASSETS NET ASSETS
Financial Performance
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146 146137
124 121125 126.9 123.1 120.4
233.6
0
50
100
150
200
250
2013 2014 2015 2016 2017
GI _ DEBTORS & CLAIMS DAYS
Debtor Turnover Days Claims Turnover days
Financial Performance
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105,738,237 126,264,941
172,788,099 197,055,237
253,837,256
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
2013 2014 2015 2016 2017
LIFE _ Net Assets
Financial Performance
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41.237.3
42.045.5
42.246.4
25.1
18.8 18.6 19.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
2013 2014 2015 2016 2017
LIFE _ DEBTORS & CLAIMS DAYS
Life _ Debtor turnover days Claims Turnover days
Regulatory Reforms- Solvency• New solvency rules will address the following
– Flexibility, as provisions will be in regulations as opposed to the main law
– Enhance response to market, credit and liquidity risks. Currently• Real estate is completely admissible ; • Premium in default for 60 days is admissible• Assets held outside the country are inadmissible• Assets are disproportionately discounted (either the asset is in -100%
or out- 100%, and No value in between )
– Respond to risks associated with the following• Measurement/Estimation risk in liabilities & reserves• type and volume of insurance • Quality of re-insurance
• Introduce specific penalties for late submission of financial reports (included the Bill)
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Regulatory Reforms- Governance• Governance Regulations will likely address the following
concerns– No limit on ownership or control by any one person– Position of chairman & CEO can be held by one person– Board of directors with unbalanced skills set– Any number of directors is acceptable– Clarity on the number boards any one person can serve– Lack of guidance on independence directors – No requirements for Committees in respect of audit , risk mgt,
etc– ERM and Internal control systems are not mandatory– Managers combining too many operational roles ( e.g Head of
underwriting , claims and re-insurance vested in one person)
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Regulatory Reforms- conduct of business
• Regulations will , at the minimum, aim to address the following
– Disclosure requirements (key facts statements) pre-sale and at the point of sale.
– Premium management (addressed in the Bill)
– Standards on settlement of claims
– Guideline on internal dispute resolution
– Power to the Authority to prescribe administrative penalties
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Regulatory Reforms- Industry Development
• Regulations will aim to address the following – Promote utilization of local capacity.– Specify how to monitor and enforce provisions limiting the
placing of insurance within Zambia (e.g transport, engineering )
• Enhancing the scope of mandatory insurance ( the best approach is to involve stakeholders beyond the Insurance industry)
• Microinsurance Regulations • Caution – Regulations must work with other
interventions (e.g adequate capacity, demand stimulation, Government support) to assure that industry development will take place.
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Thank You
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