Zambia Insurance Sector Report

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In 2013, the Zambian insurance industry Gross Written Premium (GWP) was of ZMW 1,573 million, and grew by 7% between 2012 and 2013.

It had grown by 21% between 2011 and 2012, to reach ZMW 1,471 million

The Zambia insurance sector GWP grew by 163% over a period of five years to reach ZMW 1,216 million in 2011, from ZMW 462 million in 2006.

Zambia’s financial services industry of which insurance is a part of contributes 8% to Zambia’s total GDP (Source : CSO August 2013 report) ; the insurance industry contributes just under 2% to the total GDP.

The insurance penetration levels continue to be very low compared to other countries in the region, with a penetration rate that stood at 1.37% in 2012, compared with the African average of 3.65%.

Zambia Insurance Sector Liberalization

Until 1991, there was only one insurance company: Zambia State Insurance Corporation (ZSIC).

Since 1991, Zambia started liberalizing its economy and its finance sector, leading to the entry of new financial institutions.

Since deregulation in 1992, a number of locally registered insurance companies have emerged.

The Insurance Act 1997 was amended in 2005, allowing insurance companies to provide life insurances.

Zambia Insurance Sector Players 

As of January 31st 2014, the Zambian insurance industry had the following players (as of January 31st, 2014):

2 Reinsurance Companies, 15 General Insurance Companies, 8 Life Insurance Companies (from 6 in 2006), 41 Insurance Brokers (from 36 in 2006), 266 Insurance Agents (from 47 in 2006), 8 Claims Agents (from 6 in 2006), 6 Motor Assessors, 6 Loss Adjusters, 2 Risk Surveyors (from 0 in 2006).

Significant increase in the number of players was especially seen in life insurance, as well as in insurance brokers, loss adjusters and insurance agents.

 

Insurance CompaniesActivity
Source: Zambia Pension and Insurance Authority
Prima Reinsurance PLC (PRIMA-RE:LUSE)Reinsurance
Zambian Reinsurance Company LimitedReinsurance
Advantage Insurance LtdGeneral Insurance
African Grey Insurance LtdGeneral Insurance
A-Plus General Insurance Company LtdGeneral Insurance
Diamond General Insurance LtdGeneral Insurance
Focus General Insurance LtdGeneral Insurance
General Alliance Insurance (Z) LtdGeneral Insurance
Goldman Insurance LtdGeneral Insurance
Hollard Insurance Zambia LtdGeneral Insurance
Madison General Insurance Company (Z) LtdGeneral Insurance
Mayfair Insurance Company (Z) LtdGeneral Insurance
Meanwood General Insurance Company LtdGeneral Insurance
NICO Insurance Zambia LtdGeneral Insurance
Phoenix of Zambia Assurance Company (2009) LtdGeneral Insurance
Professional Insurance Corporation Zambia LtdGeneral Insurance
ZSIC General Insurance LtdGeneral Insurance
African Life Assurance Company LtdLong Time Insurance
Barclays Life (Z) LtdLong Time Insurance
Blue Assurance Services (Z) LtdLong Time Insurance
Hollard Life Zambia LtdLong Time Insurance
Madison Life Insurance Company Zambia LtdLong Time Insurance
Metropolitan Life Zambia LtdLong Time Insurance
Professional Life Assurance LtdLong Time Insurance
ZSIC Life LtdLong Time Insurance

Zambia Insurance Sector Performances

The Zambia insurance industry Gross Written Premium (GWP) grew by 163% over the period of five years to reach ZMW 1,216 million in 2011 from ZMW 462 million in 2006.

Zambia’s financial services industry of which insurance is a part of contributes 8% to Zambia’s total GDP (Source : CSO August 2013 report) ; the insurance industry contributes just under 2% to the total GDP.

Growth of Zambian insurance industry has been quite low in recent years, between 2012 and 2013, the GWP only grew by 7% compared to 21% between 2011 and 2012. 

The insurance penetration levels continue to be very low compared to other countries in the region, with a penetration rate that stood at 1.37% in 2012, compared with the African average of 3.65%.

The non life companies accounted for 74% of GWP in 2006 and 71% in 2011. The ceding ratio for non-life was 38% in 2006 and 47% in 2011.

Unlike most developed markets where life insurance business is significantly higher than non-life business, Zambia’s life insurance business only contributes  30% of the total insurance business. 

The Life sector had a ceding ratio of 10% in 2006 and 15% in 2011.

Zambian Insurance Sector Outlook

Generally, the Zambian insurance sector is regarded as performing lower than it could.

On the demand side, low insurance culture, lack of understanding of insurance among Zambians are often cited as one of the major reasons.

On the supply side, lack of innovations in product design and delivery among insurers to broaden the market base of insurance products is cited as one of the contributing factors.

Notably, current insurance usage is skewed towards the formally employed or those that earn a regular and predictable income, though even within this segment the market is underserved and there is significant room for growth.

However, insurance penetration levels continue to be very low compared to other countries in the region, with a penetration rate that stood at 1.37% in 2012, compared with the African average of 3.65%, but even more compared to countries such as the UK (13.4%) or the USA (11.6%). 

This means that there is a potential market to take over in the Zambian insurance sector. 

Moreover, to increase the insurance industry’s presence, a number of initiatives are currently being implemented. 

A microinsurance development process spearheaded by a multi-stakeholder technical advisory group and supported by FinMark Trust, International Labour Organisation’s Microinsurance Innovation Facility and Financial Sector Deepening Zambia (FSDZ).

A New Insurance Bill 2013, in advanced stages of formalisation. 

A draft for Microinsurance Regulations 2014, aimed at providing and enabling environment and supervisory framework of microinsurance business, currently undergoing stakeholder review. 

A five-year strategic plan for the Insurers Association of Zambia, in the process of being finalised.

Strategic areas identified include increasing the performance of the insurance industry, championing the development of microinsurance, technical skills development, achieving and sustaining a positive public perception of insurance.

The Insurance Week 2014, after its first edition in 2013 under the theme « Insurance for All », came back in September 2014 with the theme « My Life, My Well-Being, My Insurance », aiming at changing the perception of the sector and increase its visibility among Zambians.