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Positive growth in 2016

Monika Singh
Friday, October 13, 2017

THE insurance broking industry recorded a positive growth in 2016 whereby its total premiums transacted grew by 10.2 per cent to $155.2 million.

This growth was mainly attributed to the "others" and medical and life classes which grew by 71.6 per cent and 23.4 per cent to $19.3m and $20.6m, respectively.

The 2016 Insurance Annual Report released by the Reserve Bank of Fiji showed that the broking industry's balance sheet contracted over the year, attributed to the decline in outstanding premiums, despite the increased volume of business transacted during the year.

It also highlighted the fire and householders classes continued to dominate majority of the premiums handled at 49.5 per cent, followed by the transport and marine class at 15.3 per cent, miscellaneous at 13.3 per cent, medical and life at 13.3 per cent and the liability class at 8.6 per cent.

According to the annual report the balance outstanding in the broking account at year end stood at $10.5m, an increase of 6.1 per cent over the year, and reflective of greater monies received than withdrawn, in 2016.

Total premium monies received grew by 19.8 per cent to $202.2m, dominated by premiums from general insurers at 99.7 per cent while local insurers contributed 70.0 per cent of total monies with the remainder contributed by offshore insurers.

Meanwhile, total premium monies withdrawn increased by 23.5 per cent to $201.6m and brokers' payments to local insurers remained the largest component of total monies withdrawn at 56.2 per cent.

This was followed by payments to offshore insurers and payments to self at 20.3 per cent and 13.6 per cent, respectively.

The annual report showed that the broking industry recorded a growth of 20.5 per cent to $4.7m, arising from a higher increase of 10.8 per cent in total revenue when compared with the increase of 6.2 per cent in total expenses.

It said brokerage earned as commission and fees during the year increased by 11.6 per cent to $19.3m and continued to dominate the total revenue base of the insurance broking industry at 97.8 per cent with interest income and "other" revenue accounting for the remainder of total revenue earned.

For the insurance brokers in the industry, the increase in expenses was largely driven by salaries and wages, which grew by 9.8 per cent to $5.9m.

Similarly, "other" expenses grew by 5.5 per cent to $6.6m.

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