Diamond General Insurance has recorded a 43percent growth rate in the Gross Premium written during the financial year 2011.
According to it financial end of the year report diamond insurance acting chief executive officer christabel Banda says the insurance company’s Gross Premium written has continued to grow, averaging over 40percent in the last 5 years with the growth of 61percent in 2010 .
Mrs. Banda says during the year under review, the operating expenses grew by 20percent, which is lower than the Gross Premium growth, as management continued to strictly monitor and control expenditure in 2011.
She says the claims ratio increased in 2011; however this is still below the market average adding that management will continue the tightening of underwriting procedures to ensure that a quality book of business is maintained.
The acting chief executive officer says Diamond’s investment portfolio grew by 34percent in 2011, as the company continued to build capacity in its liquidity management processes and the focus of the investment portfolio has continued to be security, liquidity and yield.
Mrs. Banda says during the year, Diamond successfully opened three branches, expanding its presence in Ndola, Chingola and Livingstone to boost insurance inclusions and make insurance accessible to growing economic growth in the emerging towns in Zambia.
She says Diamond posted strong results in 2011 despite a slowdown in general domestic insurance industry which faced challenges from the introduction of Value added Tax (VAT) on insurance products.
Mrs. Banda says the introduction of VAT negatively impacted the domestic insurance despite the local economic fundamentals continuing to be strong in 2011 with the Gross Domestic Product (GDP) growing by 6.5percent largely driven by growth in the mining, construction and agriculture sectors which saw the country record unprecedented three million metric tones of maize in 2011.
She says the Insurance industry growth slowed down in 2011, though the growth was still above inflation but the slowdown was generally attributed to the introduction of VAT as the industry struggled with its implementation due to the unique nature of the services provided and the different players in the supply chain.
Mrs. Banda has projected that this year 2012 is expected to be another interesting and challenging year for the company, with increased competition expected as more new players come on the market.
She has observed that a positive development has been the allowance given by the Zambia Revenue Authority to permit insurance companies to account for their VAT quarterly effective 1st January 2012 in line with the recommendations made by the Ministry of Finance and National Planning after submissions made by the Industry players.
Mrs. Banda says after the expansion programme in 2011, the focus in 2012 for the company will be to enhance and consolidate the capacity of all its branches and agencies throughout the country.