News / National
CVR bottlenecks bleed vehicle insurers
16 Oct 2020 at 07:02hrs | Views
THE Central Vehicle Registry (CVR)'s inability to register vehicles has cost the insurance sector $60 million in mandatory third-party motor insurance premiums, according to the Insurance Council of Zimbabwe (ICZ).
The CVR's operations have been affected by lack of financial resources to produce vehicle registration plates.
The third party motor insurance is the largest contributor of premiums to the motor insurance class.
Addressing journalists during the insurance and pension mentorship programme recently, ICZ chief executive officer Tendai Karonga said the failure by the CVR to issue registration plates had crippled the operations of members of the council.
"Performance of motor insurance was further affected by the Central Vehicle Registry's inability to register vehicles due to lack of financial resources to produce registration plates," he said.
"This resulted in about 80 000 unregistered and uninsured vehicles on the roads, leading to a loss of the mandatory third-party motor premiums of approximately $60 million."
Karonga said the situation might persist as the CVR had financial resources to provide plates for just 32 000 vehicles, adding this would leave more than 48 000 cars unregistered.
He said the level of traffic was greatly subdued in April 2020 when lockdown restrictions to contain the spread of COVID-19 were imposed.
With the easing of restrictions on movement, traffic started to increase gradually, he said.
Karonga said one of the ICZ insurance pools negatively affected by restricted regional cross-border traffic was the motor insurance pool.
As of August 2020, he said only 59% of budgeted premiums had been collected.
In comparison to the same period last year, there was a decrease of 37% in premiums collected.
The ICZ boss said the short-term insurance's growth in gross premium written increased by 689,18% for the period January to June 2020 compared to the same period in 2019.
In real terms, after adjusting for inflation of 737,30%, the gross premium written declined by 6% and assets by 5%, according to the Insurance and Pensions Commission (Ipec) 2020 second quarter report.
Karonga said insurance and banking operations were expected to decline by 7,1% in response to the COVID-19 pandemic by end of year.
"This is one of the large classes of insurance contributing 29,45% for the period January to June 2020 to total gross premium written of the non-life insurance. In terms of real growth, there was a decline of 33% compared to the same period in 2019," he said.
ICZ is an independent self-governing association of short-term insurers and reinsurers in Zimbabwe duly registered by Ipec.
The council's current membership stands at 18 direct insurers and eight reinsurers, according to Karonga.
The CVR's operations have been affected by lack of financial resources to produce vehicle registration plates.
The third party motor insurance is the largest contributor of premiums to the motor insurance class.
Addressing journalists during the insurance and pension mentorship programme recently, ICZ chief executive officer Tendai Karonga said the failure by the CVR to issue registration plates had crippled the operations of members of the council.
"Performance of motor insurance was further affected by the Central Vehicle Registry's inability to register vehicles due to lack of financial resources to produce registration plates," he said.
"This resulted in about 80 000 unregistered and uninsured vehicles on the roads, leading to a loss of the mandatory third-party motor premiums of approximately $60 million."
Karonga said the situation might persist as the CVR had financial resources to provide plates for just 32 000 vehicles, adding this would leave more than 48 000 cars unregistered.
He said the level of traffic was greatly subdued in April 2020 when lockdown restrictions to contain the spread of COVID-19 were imposed.
With the easing of restrictions on movement, traffic started to increase gradually, he said.
As of August 2020, he said only 59% of budgeted premiums had been collected.
In comparison to the same period last year, there was a decrease of 37% in premiums collected.
The ICZ boss said the short-term insurance's growth in gross premium written increased by 689,18% for the period January to June 2020 compared to the same period in 2019.
In real terms, after adjusting for inflation of 737,30%, the gross premium written declined by 6% and assets by 5%, according to the Insurance and Pensions Commission (Ipec) 2020 second quarter report.
Karonga said insurance and banking operations were expected to decline by 7,1% in response to the COVID-19 pandemic by end of year.
"This is one of the large classes of insurance contributing 29,45% for the period January to June 2020 to total gross premium written of the non-life insurance. In terms of real growth, there was a decline of 33% compared to the same period in 2019," he said.
ICZ is an independent self-governing association of short-term insurers and reinsurers in Zimbabwe duly registered by Ipec.
The council's current membership stands at 18 direct insurers and eight reinsurers, according to Karonga.
Source - newsday
