• The insurance industry grew by 13 percent in 2021 compared to 2020.
• 2020 was rough because of Covid-19 issues.
• Sector players are optimistic that 2022 will also be a very good year despite the high cost of doing business.

The insurance sector plays a crucial role in the sustainable growth of any economy.

This is because insurance has potential to turn accumulated capital into productive investments, enables mitigation of losses, financial stability and promotes trade and commerce activities which results into sustainable economic growth and development.

Sadly for Zambia, this sector only contributes 1.5 percent to the country’s Gross Domestic Product (GDP).

According to Ministry of Finance and National Planning Permanent Secretary Trevor Kaunda, insurance sector’s real growth rate has been limited due to macroeconomic pressures with inflation and limited economic performance ultimately affecting premium growth and penetration of the industry in recent years.

Mr. Kaunda said the industry’s contribution to GDP needs to improve and challenged sector players to change their business models and redouble their efforts.

He noted that the new Insurance Act number 38 of 2021 which will come into effect later this year will have a positive impact on the country’s insurance sector.

“Insurance companies have been given a platform to accelerate consumer education with other financial players through the National Financial Inclusion Strategy which was developed to speed up progress towards an inclusive, stable and competitive financial sector,” Mr. Kaunda stated.
However, despite the challenges highlighted above, the insurance industry grew by 13 percent in 2021 compared to 2020.
Speaking in an interview with Money FM News, Insurers Association of Zambia (IAZ) President Moses Siame noted that 2020 was rough because that was the time when the sector was trying to grapple around Covid-19 issues unlike 2021 where industry players got a hang of the pandemic and knew how to navigate around it, hence leading to the 13 percent growth.
Mr. Siame stated that statistics regarding performance of the sector in the first quarter of 2022 are not yet ready.
“Performance of the Insurance sector in quarter one of 2021, compared to 2020 there was some improvement with 13 percent growth in the industry. The whole industry grew by about 13 percent. 2020 was rough because that is when the industry was trying to grapple around the issues of Covid-19 but 2021 seems we all got a hang of it and we knew how to navigate around it and that led to the 13 percent growth that we have seen as an industry. For 2022 first quarter, it’s a bit too early to have those statistics,” Mr. Siame said.
And Mr. Siame said sector players are optimistic that 2022 will also be a very good year despite the high cost of doing business.
“We are very optimistic that 2022 is going to be a very good year as well. I think we can all see that people are more relaxed, business is going on to a point where it becomes more scary that we have dropped our guard in terms of Covid but those restrictions are out and there are a number of economic fundamentals that look like we are going in the right direction. There are these issues around increased cost of doing business but I think we are headed for a better year as an industry.
As financial intermediaries with long investment horizons, insurance companies can contribute to the provision of long-term instruments to finance corporate investment and housing.