Insurance Industry’s 2022 Performance Sparks Optimism for Growth

The performance of Zambia’s insurance sector in 2022 has been a cause for optimism as it witnessed notable growth in premiums and an increase in settled claims, indicating that the industry is effectively meeting clients’ needs. The reinsurance space also experienced exponential growth, showcasing the industry’s positive contribution to the national GDP.

The industry aims to maintain this growth momentum, focusing on enhancing customer experience and further increasing insurance uptake across the country.

According to the recently released data by the Insurers Association of Zambia, the insurance sector recorded gross written premiums of ZMW 6.033 billion in 2022, a 13% increase from ZMW 5.344 billion in 2021. Non-life insurance saw premiums of ZMW 3.867 billion, up from ZMW 3.514 billion in 2021, while life insurance premiums reached ZMW 2.166 billion, compared to ZMW 1.830 billion in the previous year.

The industry also observed a 20% increase in net claims, totaling ZMW 1.87 billion in 2022 compared to ZMW 1.56 billion in 2021. Earned premiums grew by 24% from ZMW 2.85 billion in 2021 to ZMW 3.53 billion in 2022.

Notably, the reinsurance sector witnessed an astounding 245.75% growth in gross reinsurance premiums, surging to ZMW 921 million Kwacha in 2022.

Moreover, the insurance industry’s underwriting profit saw a significant increase of 132% to ZMW 1.656 million in 2022 from ZMW 0.715 million in 2021.

The report also highlighted the industry’s financial strength, with shareholders’ capital, life fund, and reserve increasing by 31% to ZMW 1.47 billion kwacha in 2022 from ZMW 1.12 billion Kwacha in 2021. Total assets and liabilities showed a similar growth trend, rising by 30% respectively to ZMW 7.42 billion and ZMW 5.96 billion in 2022 from ZMW 5.69 billion and ZMW 4.57 billion in 2021.

However, the report also flagged some challenges, as on average, 17% of insurance business written in a calendar year remained uncollected at year-end. Additionally, 37% of debt at the end of the year either became bad debt or was written off, impacting the industry’s ability to pay claims. In light of these challenges, the Association is considering proposals for insurance to be sold on a cash and carry basis.

Nkaka Mwashika (Dr), Executive Director of the Association, emphasized the importance of insurance in managing various risks. Insurance acts as a safety net, cushioning individuals and organizations against the financial impact of unexpected losses, medical emergencies, property damage, and legal liabilities. He urged the general public to make full use of insurance services from duly licensed insurance providers.

The positive growth and optimistic outlook of the insurance industry indicate its potential in contributing to Zambia’s economic development and financial resilience for individuals and businesses alike.

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