• Under the Leadership of the recently retired Commissioner of Insurance at IPEC, this regulator has produced some of the best sets of insurance market reports in the world based on a robust set of performance indicators that allows for an appropriate assessment of financial soundness of the 4 sectors of the insurance market of Life, Non-Life, Funeral and Pensions.
• Indicators are based on a very sound methodological framework known as CARAMELS
• The comprehensive reports which are appropriately customized for the different types of risks in the different sectors of insurance offer a practical framework which could be used as a guideline of best practice for benchmarking appropriate quality of insurance market reports.
• The reporting is done on a quarterly basis which allows for appropriate monitoring of financial soundness on a regular basis and allows for early intervention instead of waiting for the year-end report, as per the practice of all other regulators in Africa. This is completely the opposite of some of the challenges that we face in markets like Angola where the latest available reports relates to 2013.
• The regulator applies immediate actions/ sanctions if any of the operators fails to meet any of the key indicators in the quarter under review. She does not wait for the company to become insolvent (like the case of BAI in Mauritius). She applies immediate measures such as prevent writing of new business or demanding of additional capitalization. If you fail to submit, she will suspend/ cancel the license
• There is complete transparency in how the financial soundness is measured and assessed. There is no reference to unexplained complex things that very few people understand such as “risk-based solvency model”.
With this approach to insurance market reporting based on this framework, the following are some of the key benefits:
• Early intervention which allows the regulation process to be more dynamic and gives room for ongoing corrective measures to be implemented before a crisis emerges
• Appropriate and proportional regulation is applied for areas such as funeral which is important for purposes of supporting new emerging areas such as microinsurance initiatives for the low-income segments
• The quarterly reporting approach allows tracking and reviewing of issues of financial soundness and in the event of any issues emerging, one can easily track and identify when and where the underlying causes could have emerged.
• This model can be replicated in all other insurance markets in Africa. When you review the different reports from the different regulstors you can see that there is a lack of an appropriate model for the regulators to use for purposes of compiling and publishing appropriate market reports.
• You may find detailed current and historical reports to as far back as 2009 for the 4 sectors of Life, Non-Life, Funeral and Pensions on the following website: http://www.ipec.co.zw/index.php/media-centre/ipec-reports
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