Zim insurance services ‘elitist’, need re-modelling
INSURANCE companies should repackage their products to make them affordable to low income earners who constitute the bulk of the population and cannot afford expensive policies currently on the market.
This was said by the Permanent Secretary (non-accounting) in the Ministry of Finance and Economic Development Dr Judith Kateera at the Zimbabwe Micro-Insurance Summit in Victoria Falls on Tuesday.
Dr Kateera, who is responsible for policy making in the Finance Ministry, said most insurance companies were failing to provide service because they were elitist and spend the bulk of their money pampering their boards and management at the expense of the deserving needy citizens.
As a result, only 30 percent of the country’s population is insured as insurance cover is way beyond reach.
“All we are saying is that insurance companies should be able to cover the poor and as such we are encouraging them to restructure and include the least paid in their products,” said Dr Kateera.
“Some insurance companies fail to provide service because of high administrative costs, which are just too high because of packages and allowances for management hence less money is left for clients. The insurance companies should revisit their budgets than to focus on maintaining lavish lifestyles for boards and managers at the expense of the poor deserving people.”
Dr Kateera said statistics show that 70 percent of the country’s population lives in rural areas where they depend on agriculture, which is at greater risk of climate change and floods hence the need for them to be covered in their agricultural production.
“Only 30 percent of Zimbabweans are insured one way or the other and that means we’ve 70 percent at risk. As Government we are trying to reach out and bring the poor into the economic system and our take off point is to understand the extent to which the general pub l ic know about benefits of insurance and look at how many service providers have cover on health, agriculture and others,” added Dr Kateera.
She urged insurance providers to structure their products in a way affordable to people as well as move digital so that even those in the rural areas can transact in the comfort of their homesteads without wasting money and time going to town.
Dr Kateera who was guest of honour at the workshop, said the onus lies with insurance companies to reposition themselves and embrace the poor since the micro-insurance concept is based on numbers, which will result in cheaper and affordable policies.
“As Government we say as we liberalise, we allow many players to come in and we will define rules through the regulatory framework, which is why we are consulting so that we agree on a number of issues,” she added.
The workshop was organised by Afri-Sure, in conjunction with Insurance and Pension Commission (IPEC) and Treasury.
A total of 60 experts from local insurance companies and abroad attended the two day meeting.
IPEC deputy chairman Mr George Mazhude said they were in the process of crafting a law that will compel all service providers to abide by set standards.
Mr Victor Mu k o t e k w a of Afri-Sure Consultancy said plans w e r e underway to embark on countrywide awa r e n e s s c amp a i g n s to encourage people to insure their property.
Dr Judith Kateera