Short-term insurance sector performance affected by Covid-19

By James Muonwa

The performance of the short-term insurance sector was subdued as a
result of the outbreak of the global coronavirus (Covid-19) pandemic.
The motor insurance sector was further hard-hit by the Central Vehicle
Registry (CVR)'s failure to clear a backlog of unregistered vehicles
due to non-availability of resources to produce registration number
This was revealed by Insurance Council of Zimbabwe (ICZ) chief
executive officer, Tendai Karonga, during a virtual insurance and
pensions workshop jointly-organised by the Insurance and Pensions
Commission (IPEC) and the National Social Security Authority (NSSA)
"As a result of Covid-19, the level of traffic was greatly subdued in
April 2020 when the lockdown restrictions were imposed... This
negatively impacted on the short-term insurance sector which includes
motor vehicle insurance," said Karonga.
He said the poor performance of the sector was compounded by CVR which
was unable to issue number plates.
"This resulted in about 80 000 unregistered and uninsured vehicles on
the roads leading to a loss of the mandatory Third-Party Motor
premiums of approximately $60million," said Karonga.
The situation could persist as CVR only has financial resources to
manufacture and issue number plates for only 32 000 vehicles. This
leaves a total 48 000 backlog.
Karonga said the above-mentioned statistics were derived from a CVR
report of September 28 presented to the Parliamentary Portfolio
Committee on Transport.
The ICZ boss said as a result the insurance and banking operations
were expected to decline by 7,1 percent in response to Covid-19 by the
end of the year.
The motor insurance industry constituted the bulk of insurance,
contributing 29,45 percent for the period extending January to June
2020 to the Gross Premium Written (GPW) of the non-life insurance.
"Third-Party Motor Insurance is the largest contributor of premiums to
the motor insurance class. Data collection structures are being
implemented to accurately record premium contributions of the motor
insurance sub-class," he said.-TOP NEWS

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