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Inflation gives insurance sector headache – NewsDay

Insurance and Pensions Commission (Ipec)’s first quarter short-term insurance report shows that investments in prescribed assets by short-term insurers increased by 1 349,5% to ZWL$7,70 billion.

INADEQUATE inflation-linked government securities are choking the insurance sector as players fail to re-subscribe to them, NewsDay Business has learnt.

The situation is reportedly threatening the sector’s capacity to indemnify policyholders in the event of claims.

Government securities are a composite term which covers Treasury bills, government bonds, prescribed assets and over the counter traded bills issued by the government which are mainly issued to fund specific projects or issued to curb liquidity flow on the market.

Information availed at the just ended regulators retreat indicates that the bulk of Africa’s investments in the insurance sector were in government securities followed by term deposits, investment property and equities.

In Zimbabwe, however, the investment asset mix reflected a steep fall in government securities investments from around 55% to slightly above 25% as macro-economic ills took a toll on the sector.

Arguments are that macro-economic factors such as inflation, currency fluctuations and the exchange rate are making these securities less attractive in a volatile economy like Zimbabwe.

Grand Reinsurance Group managing director Tatenda Katome told NewsDay Business on the sidelines of the retreat that it was difficult to invest in local currency government securities in an environment which is characterised by high inflation and an unstable exchange rate.

“The challenge we are facing is that they are issued in local currency thus very vulnerable to inflation and exchange rate, making it difficult for insurance sector to re-subscribe to those government securities especially when the environment is quite volatile from a macro-economic perspective given that we are investing policyholder funds which are carrying certain liabilities to policyholders,” he said.

“In the event of a claim, we still need to indemnify the policyholders to put them back in the position they were before the claim.”

Katome said there was a need to work with the government to come up with products packaged in such a way that they are linked to inflation and exchange rate distortions.

He added that the most difficult part was that the industry was compelled by law to have at least 10% of its assets invested in prescribed assets, many of which, by default, fell into the category of government securities.

While admitting that the assets were available as the government was making efforts, he said the options to choose from remained limited.

“If you do not invest in prescribed assets you are viewed as non-compliant and there are penalties to that.

“From the insurance and re-insurance perspectives, we have faced severe liquidity challenges which are being driven by monetary policies that are being availed to curb inflation, exchange rate.

“While we can see that the exchange rate has stabilised a bit for the past 2 to 3 months  as a result of government choking  the market  where in particular they haven’t been paying contractors, we are not sure what will happen now that elections are over. Maybe they will start paying and this will eventually flood the market,” he added.

Insurance and Pensions Commission (Ipec)’s first quarter short-term insurance report shows that investments in prescribed assets by short-term insurers increased by 1 349,5% to ZWL$7,70 billion.

Short-term re-insurers increased by 605% in nominal terms to ZWL$14,90 billion.

Four out of the 20 short-term insurers were compliant with the minimum prescribed asset ratio of 10% while three out of the 10 short-term reinsurers were compliant, with the minimum prescribed asset ratio of 10%.

“For the period under review, the total investments in prescribed assets by the life assurance sector amounted to ZW$38 billion, translating to a sector compliance level of 8%.

“Three out of 11 life assurers were compliant with the minimum prescribed asset ratio of 15% of adjusted assets. Compliance with prescribed asset requirements remains very low. To ensure compliance with prescribed asset requirements, the commission will be escalating regulatory measures in line with Statutory Instrument 206 of 2019,” Ipec said.

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Indian Billionaire Harpal Randhawa, 22-Year-Old Son Killed In Zimbabwe Plane Crash – NDTV

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Indian Billionaire Harpal Randhawa, 22-Year-Old Son Killed In Zimbabwe Plane Crash

The incident occurred when their private plane crashed near a diamond mine

Indian billionaire and mining tycoon Harpal Randhawa and his 22-year-old son Amer were among six people who died in a plane crash in Zimbabwe on September 29, as per a PTI report. The tragic incident occurred when their private plane crashed near a diamond mine in southwestern Zimbabwe after experiencing a technical fault

Notably, Harpal Randhawa is the owner of RioZim, a diversified mining company producing gold and coal as well as refining nickel and copper. Mr Randhawa also founded the $4-billion private equity business GEM Holdings.

The mining tycoon and his son were traveling in a Cessna 206 aircraft, privately owned by RioZim. They were en route from Harare to the Murowa diamond mine when the accident happened. The single-engined aircraft crashed near the Murowa Diamonds mine, which is partly owned by RioZim. All passengers and crew onboard died in the accident.

Filmmaker Hopewell Chinono, a friend of Mr Randhawa, condoled his death on X and wrote, ”I am deeply saddened with the passing of Harpal Randhawa, the owner of Rio Zim who died in a plane crash in Zvishavane. 5 other people including his son who was also a pilot, but a passenger on this flight also died in the crash.”

Here’s the tweet:

”He was very generous with life advice, and very humble for the wealthy man that he was. Through him, I met many people in the business, diplomatic, and political worlds. My thoughts are with his wife, family, friends, and the Rio Zim community. Rest in Peace, your works and love for Zimbabwe will be your lasting legacy,” he added. 

Mr Chinono also put up a tweet informing of the memorial service for the father-son duo. 

Meanwhile, the local community and law enforcement agencies are working together to manage the aftermath of the plane crash.

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Indian Billionaire Harpal Randhawa, 22-Year-Old Son Killed In Zimbabwe Plane Crash – NDTV

<!–

–>

Indian Billionaire Harpal Randhawa, 22-Year-Old Son Killed In Zimbabwe Plane Crash

The incident occurred when their private plane crashed near a diamond mine

Indian billionaire and mining tycoon Harpal Randhawa and his 22-year-old son Amer were among six people who died in a plane crash in Zimbabwe on September 29, as per a PTI report. The tragic incident occurred when their private plane crashed near a diamond mine in southwestern Zimbabwe after experiencing a technical fault

Notably, Harpal Randhawa is the owner of RioZim, a diversified mining company producing gold and coal as well as refining nickel and copper. Mr Randhawa also founded the $4-billion private equity business GEM Holdings.

The mining tycoon and his son were traveling in a Cessna 206 aircraft, privately owned by RioZim. They were en route from Harare to the Murowa diamond mine when the accident happened. The single-engined aircraft crashed near the Murowa Diamonds mine, which is partly owned by RioZim. All passengers and crew onboard died in the accident.

Filmmaker Hopewell Chinono, a friend of Mr Randhawa, condoled his death on X and wrote, ”I am deeply saddened with the passing of Harpal Randhawa, the owner of Rio Zim who died in a plane crash in Zvishavane. 5 other people including his son who was also a pilot, but a passenger on this flight also died in the crash.”

Here’s the tweet:

”He was very generous with life advice, and very humble for the wealthy man that he was. Through him, I met many people in the business, diplomatic, and political worlds. My thoughts are with his wife, family, friends, and the Rio Zim community. Rest in Peace, your works and love for Zimbabwe will be your lasting legacy,” he added. 

Mr Chinono also put up a tweet informing of the memorial service for the father-son duo. 

Meanwhile, the local community and law enforcement agencies are working together to manage the aftermath of the plane crash.

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Harpal Randhawa, Indian mining mogul, and his son die in Zimbabwe plane crash – Business Today

Six people, including two Indian nationals, were killed in a plane crash in Zimbabwe on September 30. The plane, a Cessna 206, which was en route from Harare to the Murowa diamond mine crashed shortly after taking off from Charles Prince Airport in Harare. The cause of the crash is still under investigation.

Harpal Randhawa, the owner of RioZim, a diversified mining firm producing gold and coal as well as refining nickel and copper, was killed, along with his son and four others, when the plane crashed in Mashava’s Zvamahande district, according to iHarare, a Zimbabwean news and media website.

The Cessna 206 aircraft, owned by RioZim, was en route from Harare to the Murowa diamond mine when the tragic incident occurred on Friday.

The single-engined aircraft crashed near the Murowa Diamonds mine, which is partly owned by RioZim.

The plane encountered a technical malfunction, which may have resulted in a mid-air explosion, before crashing into Peter Farm in the Zvamahande region.

According to the investigation, all passengers and staff onboard died in the disaster.

According to the Herald, a state-owned daily newspaper, four of the victims were foreigners and the other two Zimbabweans.

“The Zimbabwe Republic Police reported a plane crash which occurred on September 29 between 7.30 am and 8 am, where six people are confirmed dead,” police said.

“The Murowa Diamond Company (RioZim)-owned white and red Zcam aircraft had left Harare for the mine at 6 am and crashed about 6km from Mashava.”

RioZim acknowledged the crash and stated that it was working with the appropriate authorities to acquire additional information.

Police have not disclosed the names of the deceased, however writer and filmmaker Hopewell Chinono, a friend of Randhawa, confirmed his death.

“I am deeply saddened by the passing of Harpal Randhawa, the owner of RioZim who died today in a plane crash in Zvishavane. Five other people including his son, who was also a pilot but a passenger on this flight, also died in the crash,” wrote Chinono on X.

“My thoughts are with his wife, family, friends and the RioZim community.”

According to the RioZim company secretary, a detailed statement will be released.

“I am unable to address the media at this time.” “We will, however, issue a statement as soon as possible,” he said.

Randhawa founded the $4-billion private equity business GEM Holdings.

Meanwhile, the local community and law police are collaborating to deal with the aftermath of the jet accident.

With inputs from PTI

Also Read: ‘Can they tell where they are?’: Shashi Tharoor shares video of South African cricketers struggling to say ‘Thiruvananthapuram

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