Fiji’s insurance industry has achieved a significant milestone, recording a gross premium income of $476 million in 2024, marking an “all-time high,” as reported by the Reserve Bank of Fiji (RBF) in its 2024 Insurance Annual Report, which was presented in Parliament by Deputy Prime Minister and Finance Minister Professor Biman Prasad.
Despite this impressive growth in premium income, the industry faced challenges with a $30 million decline in overall profitability. This downturn was attributed to a rise in total outgoings and net claims paid, which reached $254.2 million. The life insurance sector alone contributed $139.3 million in net policy payments, primarily for matured policies, while the general insurance sector accounted for $114.9 million, largely due to medical and motor vehicle claims.
In his foreword to the report, RBF Governor Ariff Ali highlighted the resilience of the Fijian insurance sector, describing it as reinforced by the robust growth of Fiji’s economy throughout 2024. He also noted a 7.5% growth in the industry’s total assets, which increased to $2.9 billion, alongside a 22.6% rise in the combined solvency surplus, now standing at $688.5 million.
One of the driving forces behind these figures has been the absence of severe catastrophic events during the year, although licensed insurers still reported increased claims. The RBF is actively working on modernizing the regulatory framework, including ongoing revisions to the Insurance Act of 1998 to facilitate the transition to International Financial Reporting Standard 17 (IFRS 17), aimed at improving transparency in insurance contract reporting, set to be adopted in January 2025.
Furthermore, the Reserve Bank is collaborating with development partners to establish a parametric micro-insurance sector in Fiji. This initiative is particularly focused on providing climate-risk insurance products to households vulnerable to climate-related challenges. In August 2024, a grant agreement was made with the InsuResilience Solutions Fund to enhance climate risk insurance offerings in Fiji.
Looking ahead, the insurance sector is expected to retain its positive momentum into 2025. However, the governor cautioned that the industry must navigate an outlook increasingly at risk from the growing volume and cost of claims due to climate-related volatility and global economic instability, which are essential factors for insurers to consider in their pricing and risk management strategies.
This promising landscape for Fiji’s insurance industry not only underscores the sector’s pivotal role in economic stability but also reflects the government’s and Reserve Bank’s commitment to sustaining growth and consumer protection in the evolving financial ecosystem.