Namibians invest N$34.2 billion in life insurance

Namibians took out life insurance policies worth N$34.2 billion by the end of June, the Bank of Namibia (BON) says.

The BoN’s quarterly report shows that the non-banking financial sector, which includes insurance companies, had a total asset value of N$254.7 billion at the end of the second quarter of 2024.

According to the report released yesterday, this is an 8.1% increase compared to last year.

The largest contributor to this figure is pension funds with N$144.6 billion.

“The absolute size of the pension funds continued to dominate the non-banking financial sector with N$144.6 billion of net equity of households.

“In comparison, N$34.2 billion was the net equity of households in life assurance at the end of the second quarter of 2024,” the report says.

According to the report, the country’s economy is growing at a slower pace compared to last year.

BoN spokesperson Kazembire Zemburuka says the mining industry saw a decline in growth due to a low production of diamonds and uranium, although there was an increase in the production of gold, copper, and oil and gas exploration-related activity.

Additionally, the agricultural sector experienced low crop production due to drought, and therefore reduced growth in the sector.

“The agricultural sector weakened on the back of low crop production due to the prevailing drought conditions, although the drought-induced marketing of cattle and small stock sustained activity in the sector,” he says.

Private sector credit extension (PSCE) increased slightly in the second quarter, driven by an increased demand from both businesses and households.

“The annual growth in PSCE ticked up to 1.8% relative to 1.3% in the previous quarter, supported by demand from both households and businesses,” Zemburuka says.

PSCE refers to the amount of money in loans that banks and other financial institutions provide to businesses and households.

A report by Simonis Storm Securities showed that the corporate sector experienced a decline in credit uptake of 4.2% in June.

However, household credit uptake saw growth of 2.7% when compared to the previous two months.

“All categories within the household sector showed growth in June, except for overdrafts, which slowed down,” Simonis Storm says.

According to the report, the overdraft category remains the least significant.

Mortgage loans, which make up 67.6% of household credit, increased in June – up from May.

However, growth in broad money slowed due to a decrease in the net foreign assets of banks and other depository corporations.

Growth in broad money (M2) is a measure of the total amount of money in circulation in an economy.

“The annual growth in M2 declined to 9.2% in the second quarter of 2024, from 11.6% in the previous quarter,” Zemburuka says.