Press Release No. : 23/2021
Date : 02 December 2021
The 2020 Insurance Annual Report was released by the Reserve Bank of Fiji today following its tabling in Parliament by the Honorable Minister for Economy, Mr Aiyaz Sayed-Khaiyum. The Report provides an overview of the performance of the Fijian insurance industry in one of the most challenging year in Fiji’s economic history.
In releasing the Report, Governor, Mr Ariff Ali stated that the global insurance and reinsurance industries remained resilient in 2020 despite the impact of the COVID-19 pandemic, supported by relevant supervisory measures providing operational relief, and monetary and fiscal support measures in certain economies. The Fijian insurance industry in a similar vein recorded a positive performance in 2020, registering expansion of the industry’s balance sheet, improved profitability and a strong solvency position.
Total gross premium of the insurance industry grew slightly in 2020 to $369.3 million, underpinned by endowment products of the life insurance sector, in particular the single premium life policies. The industry paid out a total of $224.6 million in claims, comprising of $128.4 million paid by life insurers and $96.2 million by general insurers.
A positive growth in underwriting results underpinned the increase in after tax profit of the general insurance sector in 2020, by 19.6 percent to $27.6 million. Operating results of the life insurance sector on the other hand, fell by 24.2 percent to an after tax profit of $16.1 million.
Governor Ali further remarked that Fiji being a small open economy has also had its share of the downside impact of COVID-19, with the spillovers from the global economic slowdown and our reliance on the tourism industry exacerbating the negative ramifications. The country therefore recorded one of the worst contraction where it is estimated that the Fijian economy contracted by 15.7 percent in 2020, compared to a 0.4 percent decline in 2019.
He concluded that the outlook for the domestic insurance industry notes the continued capacity to sustain the positive performance of 2020. In 2021, however this hinges on the duration and the continued impact of COVID-19 on the Fijian economy. The challenge therefore for insurers would be determining their strategic direction in the current economic environment, to continue to meet customer needs in terms of pricing and innovative products, ensuring at the same time their operational resilience and business continuity.
The Reserve Bank of Fiji continues to appreciate the cooperation of the insurance industry, the assistance of international institutions and development partners, and the support of the Government, in its regulatory role for the insurance industry.