FIJI’S INSURANCE INDUSTRY TO FACE CHALLENGES IN 2020: RBF

Reserve Bank of Fiji (RBF) warned on Friday that the island nation’s insurance industry is expected to face challenges in 2020 due to the COVID-19 pandemic.

While releasing the country’s 2019 insurance annual report RBF Governor, Ariff Ali, said that in a position of strength with accumulated solvency surpluses over the past years, insurers in Fiji will face challenges as demand for insurance products dampens given the prevailing labor market conditions.

Amid the new normal, Mr Ali said the effects of climate change is expected to persist which calls for continued efforts to increase coverage for disaster risk.

According to the report, the Fijian insurance industry mirrored the resilience of the global industry, registering continued growth in 2019 with the expansion of the industry’s balance sheet, improved profitability and a strong solvency position.

In 2019, the Fijian insurance industry recorded a positive performance underpinned by the growth in the total assets of domestic insurers by 7.5 per cent to FJ$1.9 billion (US$898m).

Total assets of life insurers grew by 6.2 per cent to FJ$1.4b (US$662m) with the general insurance sector’s assets increasing more strongly by 12.1 per cent to FJ$428m (US$202.4m).

While the general insurance sector recorded a decrease in claims paid by 12.2 per cent to FJ$93.2m (about US$44.1m), life insurers paid out FJ$129.9m (US$61.5m), an increase of 9.3 per cent.

The Fijian economy is expected to contract sharply in 2020, with prospects for a rebound in 2021 still being clouded by uncertainty.