... E6.6 BILLION IN ASSETS

MBABANE - Central Bank of Eswatini Governor Dr Phil Mnisi in the financial stability report issue six said: “Assets of the insurance industry amounted to E6.6 billion at the end of June 2022 from E6.3 billion in June 2021. This increase in total industry assets was driven by growth in assets for the short-term sector of 15.6 per cent and growth of 6.3 per cent for the long-term insurance sector.”

The governor mentioned that the value of insurers’ assets had been on an upward trend since the first quarter of 2021, even attaining levels above those recorded prior to the COVID-19 pandemic. Mnisi added that investment income contracted over the year ended June 2022. He said the sector’s investment income recorded a loss of E79.1 million from a surplus of E318.8 million recorded in June 2021.  “This decline in investment income was observed for both sectors but was more pronounced in the long-term insurance sector (-130.8 per cent),” he said. The above mentioned further prompted government and private sector to create and promote locally owned insurance companies.

The Eswatini Royal Insurance Corporation (ESRIC) introduced Eswatini Re Limited, a reinsurance company that is 100 per cent Eswatini owned. Eswatini Re Limited launched their reinsurance services in December 2022, with the aim to broaden the local reinsurance capacity by offering additional capacity to the local market. Eswatini Re Limited was established in October 2018; however they opened doors for operations in January 2022. They are now a new player in the reinsurance space looking to provide additional capacity within the local reinsurance space.  They have also acquired a licence to provide both long-term and short-term reinsurance services. Speaking during the official launch of the company reinsurance services last year, Eswatini Re Limited General Manager (GM) Qiniso Dlamini said they were born out of the vision of their parent company ESRIC.

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He said this was after seeing the needs and demands of the industry for reinsurance coverage.  He said reinsurance was an integral part of insurance arrangements and insurers had varying needs and requirements for reinsurance services, depending on the types and nature of insurance products they sell. “Historically local insurers have sourced insurance support from outside our borders; in 2015 the industry welcomed the first local reinsurance company. Who have over the years enjoyed support from the local market. We shall be aware that insurance and by extension reinsurance is about capacity, financial capacity, meaning having a strong balance sheet to meet one’s liabilities,” he said.  

He said their treaty programs would be structured both proportionally (quota share and surplus) and non-proportional (XOL) depending on the nature of the risk and appetite for it.
“Similarly, our facultative arrangements shall be both proportional and non-proportional, again depending on the risk, our appetite and capacity,” he added. Minister of Finance Neal Rijkenberg during the launch said Eswatini Re Limited was in line with the policies of His Majesty’s government, which were focused on the establishment of new companies, leading to the creation of employment opportunities and economic growth.   He said this level playing field would be made possible with the passing of the Reinsurance Bill of 2020, currently at consultation stage in Senate.

Rijkenberg added that among its objectives, the Bill was aimed at the establishment, recognition and promotion of reinsurance business in the insurance industry. “With these developments in the industry, government expects that the reinsurance companies would allow involved parties to reduce their exposure to risk and their capital requirements. “Most importantly, government is of the view that freeing up capital would allow insurers to underwrite more business, thus enabling economic growth and helping to create stability,” he added.
The minister also mentioned that although reinsurance in the country was a relatively new field, they were highly impressed that with Eswatini Re Limited, Eswatini now had a second registered reinsurer. “With the establishment of Eswatini Re Limited as the second resident reinsurance company in our kingdom, we hope the local insurance market will continue to grow,” he said.

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