CIMA Industry Research: Insurance

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High levels of premium receivables: a key rating restraint for short-term insurers and reinsurers in the CIMA zone
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  • CIMA Industry Research: Insurance
  • Year : Apr 2020
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Summary

Impairments of accumulated aged premium receivables undermine otherwise sound profitability. Although article 13 of the Conference Interafricaine des Marchés d’Assurance (“CIMA”) code should be reducing premium receivables for insurers, with the institution of cash and carry policies, many market participants in the CIMA zone continued to report significant amounts of premium debtors in their financial statements in 2019.

Additional Information

Overall, credit profiles of entities in the CIMA zone are expected to remain under pressures from high quantum of premium receivables, impacting more reinsurers’ financial profiles given insufficient regulatory intervention at their level. Meanwhile, sustained reductions of debtor balances at insurers levels need to be observed, considering recent relapses in markets with stronger regulatory environment.

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