BY MBONO MDLULI
MBABANE – The insurance industry has performed well in 2022, as it has been able to rake in E2.050 billion.
This is contained in the 2023 Company Survey Report produced by the Ministry of Economic Planning and Development, in collaboration with the Central Bank of Eswatini (CBE). This achievement has depicted a growth of 10.2 percent from the E1.860 billion recorded in 2021.
However, in terms of profitability, the entities’ combined profits regressed from E439.0 million in 2021 to E335.0 million, reflecting a slowdown of 23.7 percent in the review period. The short-to-medium outlook for the sector was reported to be optimistic.
This benefitted from the automation and digitalisation of systems, launch of digital products, as well as the diversification of insurance products, coupled with sensitisation of clients on available products. Additionally, the construction of new mega projects such as the Mkhondvo Ngwavuma water augmented project presents positive prospects for the insurance industry.
A total of five insurance subsector companies were visited during the 2023 company survey. All five entities reported positive performance in terms of profitability. However, the profits regressed from the previous financial year. Regarding policy holders or membership, there was a net-off as some entities reported increased membership whilst others cited reduction in their policy holders.
Similarly, a majority of the companies (four) reported an increase in premiums, mainly benefiting from either price adjustments effected in the period or new membership. Entities that posted increased premiums reaped the rewards of product diversification, the launch of digital products and intense marketing. Only a single entity reported a decline in its premiums in the period.
Moreover, the insurance industry saw a massive reduction in claims in the review period, as most entities reported lower claims in 2022 relative to the previous year, mainly attributable to the recovery from the COVID-19 pandemic. Claims in the period were cumulatively reported to have fallen by 50.0 percent, supporting company profitability. Moreover, a majority of the entities were able to curtail their expenses in the period.
