Prima Reinsurance
Proudly Zambian

Dear Shareholder,


The global reinsurance market has continued to face several challenges. Pricing in 2014 experienced double digit declines, globally, in certain lines of business and reinsurance pricing overall is expected to remain under pressure in 2015.


As premiums continue to decline and reserve releases reduce, it is expected to be increasingly challenging to deliver double digit returns on equity (ROEs) for most companies.


The market is expected to remain challenging in 2015, with rates continuing to decline, terms and conditions becoming broader and ceding commissions increasing further.


Market Overview


The Zambian economy continues to show a low penetration of insurance among the population, mainly due to lack of awareness of the benefits of insurance and a low insurance culture despite commendable efforts by the Insurers Association of Zambia that has been holding an annual Insurance Week program all over the country to highlight the value for insurance.


The entry of new insurance companies in the local market has provided some level of new business on one hand, but has also led to a decline in rates and therefore, premiums, on the other.


Some of the local insurance companies have seen a decline in their profits and even the top line, which underscores the need for continued efforts to enforce the minimum rates agreed in the market and approved by the supervisory authorities.


The investment climate has continued to be conducive and market conditions were generally favourable although the competitive environment remained difficult. The deterioration of the local currency has also had a significant effect on the overall performance of the industry.


Performance of the Company


The Company has continued to enjoy support from the domestic and international markets, showing favourable growth in terms of gross written premium.


The gross written premium for 2014 was K 30.404 million compared to K 25.453 million the previous year.


The company registered a growth of 19.45% (2013:17.18%) in gross written premium. The volume growth was due to the increase in international business which the company is sourcing in new markets within Africa such as Botswana, Uganda, Sudan and Mozambique.


The profit before tax was K3.513 million, compared to K 4.569 million attained the previous year. This represents a reduction of 23% which was affected by a significant increase in retrocession costs which, in turn, is due to the large number of risks that the company could not retain. In addition, there was a reduced release from reserves compared to the previous year.


This led to a subdued profit after tax of K 1.919 million, compared to K 3.156 million in the previous period.

The Company’s balance sheet grew marginally to K 43.343million from K 43.205million the previous year.




In order to consolidate the financial position, the Board of Directors has resolved not to recommend a dividend for the year ending 31 December 2014.


Looking Ahead


The Company will continue its aggressive marketing drive to source for new business in new markets and consolidate its position in existing markets. The company is confident that these new business prospects will grow the top line significantly in 2015.


The company is also looking to strengthen its investment program and remain a key player in the insurance industry.


On behalf of the Board of Directors and management, I wish to thank all our business partners for their support and loyalty during the year as well as the staff and management for their commitment and efforts.


David Kombe