The PDMS deadline: A N$14.4 billion problem
Crisis or opportunity?
Ruben HaimbiliThe High Court ruling on 28 November 2025, which allows the Payroll Deduction Management System (PDMS) to remain operational until March 2026, offers insurers only temporary relief. While this prevents immediate disruption to premium collections, especially for funeral and credit life policies that rely heavily on payroll deductions, it underscores the urgency for insurers in Namibia to secure alternative, reliable payment mechanisms. If PDMS is permanently discontinued, insurers risk losing a low-cost, low-risk channel that guarantees inflows from over 100 000 civil servants.
The Namibian insurance market remains robust, with long-term insurance gross written premium (GWP) reaching N$14.4 billion in 2024, a 26.8% year-on-year (y/y) increase, and profits before tax at N$4.2 billion.
Funeral and credit life policies dominate new business (38.3% and 19.3%, respectively), but these products are most vulnerable to lapses if moved to debit orders due to added bank charges. Although lapse rates improved by 62% y/y in the first quarter of 2024, churn risk rem
If PDMS ends, insurers face significant operational risks (higher collection costs, payment failures), financial risks (premium leakage, liquidity strain), and market risks (churn spikes and repricing pressure). The Namibia Financial Institutions Supervisory Authority (Namfisa) warns that smaller policies may become unviable under debit orders, potentially reversing recent GWP growth and increasing lapse rates.
In the short term, the ruling is positive, giving insurers time to adapt.
Long term, however, structural changes in premium collection, product pricing, and risk management are inevitable. Insurers must accelerate migration to debit order systems, educate policyholders, and invest in digital payment solutions to safeguard sustainability.
Lastly, Namibian insurers hold strong reserves, with total assets at N$83.8 billion and liabilities at N$71.7 billion as of 2024.
Liquid reserves grew to N$13.9 billion in the first half of 2025, and most insurers maintain solvency coverage over 10 times the required capital.
*Ruben Haimbiili is the manager bancassurance, agency and sales at a public enterprise. He writes in his own capacity and the views do not reflect those of his employer.*