During the half-year, foreign currency business for short-term insurers accounted for 82% of total insurance revenue.
SHORT-TERM insurers reported foreign currency-denominated insurance revenue amounting to US$114,55 million for the half year ended June 30, 2025, representing a 29% increase from the prior year, buoyed by motor and fire classes.
During the half-year, foreign currency business for short-term insurers accounted for 82% of total insurance revenue.
In its second quarter report, the Insurance and Pensions Commission (Ipec) noted that as of June, direct insurers had 513 019 policies, up 8% from the end of 2024.
Ipec said most of the policies reported as of June 30, 2025, were under the motor line of business, totalling 453 334 and accounting for 88% of all policies.
This dominance is primarily driven by the mandatory requirement for all vehicle owners to have insurance before registering their vehicles, ensuring steady demand.
“Short-term insurers reported foreign currency-denominated insurance revenue amounting to US$114,55 million for the half year ended 30 June 2025, representing a 29% increase from US$88,78 million reported in June 2024,” Ipec said.
“Foreign currency business accounted for 82% of total insurance revenue reported in the first half of 2025.”
During the first half of 2025, short-term insurers reported total insurance revenue of ZiG3,72 billion, equivalent to US$139,53 million at an average exchange rate of US$1:ZiG26,65.
This represented a 30% increase from the US$106,99 million recorded in the comparative period in 2024.
Ipec said foreign currency earning portion from farming insurance and public liability experienced remarkable growth, increasing by 163% and 116%, respectively.
Conversely, revenue from aviation insurance declined sharply by 42%, highlighting a contraction in this sector.
“The primary sources of foreign currency-denominated insurance revenue for short-term insurers were the motor and fire classes… The prominence of motor insurance is largely due to the mandatory nature of vehicle coverage, which ensures a steady demand from vehicle owners and the
transportation sector,” Ipec said.
“Fire insurance remains essential for homeowners, businesses, and industrial entities seeking protection against property loss due to fire outbreaks, natural disasters, or other unforeseen events. Together, these two lines of business contributed approximately 58% of the total US$ insurance revenue.”
Ipec said short-term insurers demonstrated solid core underwriting profitability, reflected by an insurance service result of ZiG395,93 million (US$14,86 million), an increase of 55% from US$9,60 million reported for the prior period.
“This figure underscores the sector’s ability to generate income from its primary insurance operations,” it said.
Regarding insurance service expenses, this amounted to ZiG3,56 billion (US$133,58 million), an increase of 77% from the US$75,26 million reported during the comparative period in 2024.
“The major drivers of the insurance service expenses were adjustments to liabilities for incurred claims and losses on onerous insurance contracts, which grew by 321% and 102% respectively,” Ipec said.
“Additionally, other expenditures not directly attributable to insurance contracts totalled ZiG359,59 million (US$13,49 million) compared to US$12,26 million in 2024.”
