Africa-Press – Eswatini. Insurers have indicated that there has been a decrease in funeral claims in the country as the effects of the COVID-19 pandemic have lessened.
This is according to the Financial Services Regulatory Authority (FSRA) statistical bulletin published on Wednesday.
The report stated that as at the end of the first quarter of 2022, net claims on policies declined when compared to the first quarter of 2021 by 11 per cent to E168 million from E190 million.
The report indicated that the overall decrease in net claims was because of an overall decline in claims against key insurance business classes. It was stated that amongst these was a 35 per cent decrease in funeral claims which had the highest value of claims in the same period last year. In 2021 there were a high number of deaths reported in the country due to the outbreak of COVID-19.
“Credit life claims and endowment claims also declined significantly by 48 per cent and 50 per cent, respectively. This change in performance is due to the decline in death rates which had been heightened by the pandemic. The resumption of economic activity also means that policy holders’ income levels have improved and therefore no longer need to access their investment policies to augment their disposable income,” the report reads.
Withdrawals
It was mentioned that despite the major decrease in insurance claims and policy benefits, an increase of 31 per cent in withdrawals for insured retirement funds was observed. FSRA indicated that claims on funeral and individual policies remain the highest, with claims ratios of 83.7 per cent and 69.3 per cent respectively.
The Long Term Insurance (LTI) according to the report incurred a net loss after tax of E228 million as opposed to the profit of E46.8million this time last year.
This loss it was stated was mainly driven by the significant increase of over 100 per cent in policy liabilities reserves while the investment income showed a decline of 86 per cent due to the net unrealised fair value losses on financial assets.
It was mentioned that the above increases were also confirmed by the significant increase in the expense ratio from 26 per cent to 76 per cent.
“All classes of insurance were profitable during the period under review except for funeral insurance, which had a loss ratio of 105.0 per cent, this is, however a significant improvement from the loss ratio of 140.0 per cent as of 31 March 2021,” the report stated.
It was further reported that a significant improvement in the group life loss ratio was observed as this decreased from 195.0 per cent to 94.0 per cent during the quarter under review.
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