Insurance premiums hit P5 billion

  • Batswana foot P5bn to insurance companies
  • Botswana Life accounts for 66% of market share


As at 2017, Batswana paid a whopping P5 billion as premiums to insurance companies, Non Bank Financial Institutions Regulatory Authority (NBFIRA) has revealed.

The Authority revealed in its latest statistics bulletin that the Life and General Insurers’ gross written premiums grew by 34 percent between 2013 and 2017, from P3.7 billion to P5 billion. The Authority says this was the result of various factors including new entrants into the market. The growth was however, diluted by the 4 percent decline in premiums recorded between 2015 and 2016. This decline was due to a 5 percent decrease in the life and annuity premiums, according to NBFIRA.

An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, life, and others. Leading life insurer, Botswana Life, accounts for most of the insurance premiums since the company commands a 66 percent market share.

Over the past five years, Botswana Life’s market share reduced to 66 percent from 80 percent, according to availed figures. As at March 31, 2018, there were eight life insurers, according to the Non-Bank Financial Institutions Regulatory Authority (NBFIRA).

NBFIRA released its 2018 Statistical Bulletin which is produced annually. The Bulletin shares statistical data collected from regulated entities over a five year period, in this case 2013-2017. The data is useful for evaluating the performance of the industries within the NonBank Financial Institutions (NBFI) sector. Additionally, it provides insights for stakeholder groups including business market researchers, academics and policy makers amongst others.

“As regulators we have a broad range of stakeholders and we are cognizant of their divergent needs. We not only regulate and supervise the Non-Bank Financial Institutions sector, but also endeavour to share information to help our stakeholders make informed decisions. The Statistical Bulletin is one of the flagship publications we produce to assist in policy making, monitoring the financial performance and therefore stability of the NBFI sector, as well as to assist researchers in bridging the knowledge gap”, said Oaitse Ramasedi, Chief Executive Officer of NBFIRA.

Assets Under Management (AUM) of Asset Managers and Management Companies indicate that Collective Investment Undertakings (CIU’s) grew significantly between 2013 and 2017, registering an increase of 53%. Discretionary Assets of Non-Collective Investment Undertakings on the other hand, registered a decrease of 11.7%, following the re-channelling of BPOPF’s mandate to invest directly in the market. This decrease offset the CIU’s growth resulting in the moderate decrease of total AUMs by 6.1%, from 56 billion in 2013 to 52 billion in 2017.

Retirement Funds Assets grew by 40% during the period under review, largely driven by an increase in membership contributions and rising investment returns. Offshore investments grew by 57% over the past five years, while local investment assets grew by 17% during the period. The slow growth in the local assets can be attributable to limited options of investment instruments in the local market and an appetite for better returns from offshore markets. This resulted in the offshore – onshore split of investment assets to widen from 59%/41% to 66%/34% in 2017 which is still within the 70%/30% pension fund investment rule.