Number of general insurance firms drop
By MAILESI BANDA LICENSED general insurance companies in January reduced to 19 from the 22 in December 2017 due to the introduction of the new minimum paid up capital requirements which came into effect on October 2, 2017.
Pensions and Insurance Authority (PIA) manager, compliance and inspection Velika Mpundu said the number of licensed general insurers in January stood at 19 from 22 in December 2017.
Government in 2015 signed Statutory Instrument (SI) number 71 which compels insurance companies increase their paid-up capital to the minimum of K20 million from K1 million, long-term and general insurers to K12 million and K10 million respectively from K1 million, while for brokers it stands at K100,000 from K50,000.
Speaking when she gave a presentation on the overview of the insurance industry in Zambia at a two days workshop in Lusaka yesterday Ms Mpundu said that the reduction in numbers was also due to the failure by some firms to renew their licences since SI 71 came into effect.
She noted that the SI had helped keep away insufficiently capitalized players from entering the insurance industry.
“The current insurance landscape is that, as at December 31 2017, we had four licensed reinsurers, 22 general insurers, 12 long term insurers, 36 insurance brokers, 230 insurance agents, six motor assessors, six loss adjusters, seven claims agents and four insurance risk surveyors,.
“In January we had licensed three reinsurers, 19 general insurers, 10 long term insurers, 35 insurance brokers, 212 insurance agents, seven motor assessors, three loss adjusters, three claims agents, four reinsurance brokers and two insurance risk surveyors,” said Ms Mpundu
She however noted that the insurance industry was not constant as there were always new players coming in and going out.
Ms. Mpundu said poor insurance awareness and lack of innovation, complex products, poor customer experience and poor capitalization of insurance companies were among the factors limiting the insurance penetration in Zambia.
She noted that there was still room for well capitalized, innovative and customer-focused companies to invest in the Zambian economy.