Effective July 1, 2019, Zimbabwean entities are now required to apply International Accounting Standard 29 (“IAS 29”), ‘Financial Reporting in Hyperinflationary Economies’, in their financial reporting. We believe the implementation of IAS 29, could significantly increase market wide balance sheet and income statement volatility. As a result, we may see significant movements in capitalisation across the sector. The impact faced by the individual entities will depend on the balance sheet structure, i.e. monetary versus non-monetary assets and the current levels of capitalisation.
GCR has introduced a FAQ on the Criteria for Rating Insurance Companies to provide greater clarity regarding the approach to regulatory insulation for FSR ratings. In essence, the criteria allows GCR to provide greater levels of regulatory insulation for the FSR ratings of insurance companies.