The preliminary projections are that the Insurance market in Zambia is poised to record a growth of 19% in 2016 compared to 17% in 2015 and 2014. The market premiums are estimated to reach K2.5billion, with general insurance premiums contributing K1.7billion with the life premiums contributing 864 million. For the first time in over a decade the general insurance premiums have grown at a faster rate than the life insurance premiums posting a growth of 23% (2015: 14%), while the life insurance premiums growth was only at 12% (2015:14). The contributions of insurance premiums to the country’s GDP however continue to be dismal contributing about 1.2%. The African average is 3.5%, meaning that the premiums are supposed to be around K7 billion for the country to catch up with the African average.
“There is a lot of premium leakage in the country with significant amounts of insurance policies being placed outside Zambia, contrary to section 120 of the 1997 Insurance Act. The Association estimates that between 2009 and 2015 the country lost out over $1.5 billion in premiums, from the import and export of goods in to and out of the country. There is need to take deliberate steps to close these loopholes so that the country can benefit from these premiums which are being externalized” Mr Paul Nkhoma the Insurers Association of Zambia President said.
Mr Nkhoma also said that the Industry has been working on a number of initiatives to raise awareness on the importance of this crucial service, whose increased consumption is a reflection of the standard of living in an economy. Consumer education initiatives are being rolled out, while the Association’s code of conduct is being strengthened to ensure that all the Insurers provide a professional service and honor their commitments to clients in the shortest possible time.
The Association is pleased to note that the Ministry of Finance has indicated that the new Insurance Act will be enacted this year. This will be a very positive move as it will help spur growth in the sector. The 2013 Insurance Bill is a very progressive document, containing among other things issues of improved governance for the sector, recognition of Micro-insurance as a separate insurance category and expansion of the intermediary service providers among other things, Mr Nkhoma noted.