The insurance industry in Namibia has recorded N$12 billion in free assets to date. Free assets are those that serve as a buffer if the insurance industry experiences an unexpected shock like the Covid-19 pandemic. The free asset ratio refers to the net assets of an insurance company as a percentage of its total assets. Free assets are the same as net assets – they are not obligated to specific insurance policies.
According to the manager of insurance at the Namibia Financial Institutions Supervisory Authority (Namfisa), John Uusiku, free assets is the difference between assets and liabilities recorded in a specific period: “The N$12 billion in total assets that are free serves as a fairly good margin of safety, which speaks to the fact that the industry is well-capitalised and it’s sound”
Currently, the total assets of the insurance industry in Namibia stand at N$56 billion, compared to insurance liabilities, which stand at about N$44 billion.
There are currently 16 life insurance companies registered and operating in Namibia. Uusiku said these companies have issued about N$1.7 million insurance contracts to the public – and out of these, approximately 34% of that is funeral insurance contracts.
In response to the Covid-19 pandemic, Uusiku stated that Namfisa held a consultation meeting with all stakeholders on the impact of the virus on their operations. This ultimately resulted in Namfisa issuing a Covid-19 circular for the insurance industry.
“In the circular, we made recommendations to insurance companies to make provisions for premium holidays. Another recommendation that was well accepted by companies was, we encouraged them to ensure they provide financial guidance and counselling to those policyholders who will want to cancel their policies in terms of providing various alternatives,” explained Usiku.
He said providing counselling had a direct positive impact on the number of policies that are currently being cancelled. He further stated that Namfisa went to the extent of encouraging insurance companies to provide some relief to insurance intermediaries.
Sanlam and Old Mutual both said even if Covid-19 related deaths are to be handled by the state, this will not affect policy claims.
Manager of marketing at Sanlam Hilaria Graig said Sanlam is trying to align itself with the current situation and have reduced the waiting period for Covid-19 related death on a funeral policy. Said Graig: “Usually, when you take out a funeral policy, the initial waiting period is six months and if the death occurs before the sixth months, you would not be paid out.”
However, for Covid-19, the waiting period was reduced to three months to ensure everyone is covered and there is no discrimination.
Furthermore, the head of distribution at Old Mutual, John Hesekiel, said Old Mutual is trying not to discriminate in respect with Covid-19 relate deaths and still complies with funeral policy contracts.
2020-09-08 11:52:47 | 2 months ago