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PROFIT-after-tax for life assurers decreased by 19,31% to $5,14 billion during the first quarter of 2021 from $6,37 billion reported during same quarter last year, the Insurance and Pensions Commission (Ipec) has revealed.

The Ipec first quarter report shows that the main driver of the decrease in profit was a decrease in fair value adjustments of investments and other income for the quarter ended March 31, 2021 as compared to the quarter ended March 31, 2020.

The report shows the combined ratio for the life assurance sector decreased from 75% for the quarter ended March 31, 2020 to 71,82% for the comparable period in 2021, an indication of a positive improvement on profitability.

“For the quarter ended March 31, 2021, profit-after-tax for life assurers decreased by 19,31% from $6,37 billion reported for the quarter ended March 31, 2020 to $5,14 billion. The main driver of the decrease in profit was a decrease in fair value adjustments of investments and other income for the quarter ended March 31, 2021 as compared to the quarter ended March 31, 2020,” Ipec said.

Ipec said significant transfers to technical liabilities, which amounted to $1,48 billion  translating to 32,32% of the gross written premium (GWP), resulted in a negative underwriting profit of $769,76 million for the quarter ended March 31, 2021.

The report shows that in nominal terms, the underwriting profit for the sector decreased by 808% from $104,76 million reported as at March 31, 2020 to an underwriting loss of $741,27 million as at March 31, 2021.

As at March 31, 2021, the life assurance industry reported total current assets amounting to $3,25 billion as compared to $3,84 billion reported as at December 31, 2020.

Current liabilities amounted to $3,49 billion for the quarter ended March 31, 2021 up from $552,4 million reported as at December 31, 2020. The life assurance sector’s average current ratio was 93,12% as at March 31, 2021 indicating inadequate liquidity to cover short-term contractual obligations.

For the quarter ended March 31, 2021, one player continued to dominate the life assurance sector in terms of GPW with a total market share of 60,82% while the remaining players shared the remaining 39,18%.

The player’s strong dominance in funeral assurance products led to its dominance in market share for the sector.

“In terms of market share by assets, two players continued to dominate the sector, with a combined market share of 53,10% of total assets, while other players shared the remaining 46,90%,”

Ipec said.

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