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Insurance Contribution to GDP Falls to 0.39% in 2023

Insurance Contribution to GDP Falls to 0.39% in 2023

In 2023, the insurance sector’s contribution to Mozambique’s Gross Domestic Product (GDP) fell to 0.39 per cent, compared to the 0.47 per cent recorded in 2022. This reduction has not affected the sector’s stability, according to a report by the Bank of Mozambique (BoM).

According to Lusa, the BoM’s 2023 financial stability report reveals that the proportion of the insurance sector’s deposits in its total investments remained at around 30 per cent, similar to the previous year.

“The insurance sector’s performance has been significantly influenced by macroeconomic conditions and the development of the national banking sector. Preliminary data indicates that the insurance sector maintained a robust solvency margin in 2023, sufficient to absorb unforeseen losses and fulfil its obligations to customers,’ the report points out.

The document states that the solvency margin coverage rate in the insurance sector has remained stable, with the required solvency margin representing approximately a quarter of the available solvency margin in recent years, exceeding regulatory limits.

“The insurance sector is essential in protecting the banking system, acting as a tool for managing vulnerabilities and risks that threaten the stability of the country’s financial system. In addition, it is interconnected to the financial market through its investment activities, fundraising and debt issuance,’ reads the report.

The Bank of Mozambique also observed a downward trend in term deposits among investments representing technical provisions, while investments in public debt securities increased. This change increases exposure to sovereign risk and could influence the dynamics of systemic risk.

According to data from the Insurance Supervision Institute of Mozambique (ISSM), there are currently 19 registered insurance companies in the country, operating in both the life and non-life sectors.


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