In­sur­ance in­dus­try to un­veil new frame­work

The Herald (Zimbabwe) - - Business - Enacy Ma­pakame

THE in­sur­ance in­dus­try will soon un­veil a new pol­icy frame­work as part of ef­forts to achieve a 20 per­cent in­sur­ance pen­e­tra­tion in 2020, as es­poused in the Gov­ern­ment’s Transna­tional Stabilisation Pro­gramme (TSP).

The TSP high­lights some strin­gent in­dus­try li­cens­ing re­quire­ments, which hin­der growth of the in­sur­ance sec­tor in Zim­babwe.

In­sur­ance and Pen­sion Com­mis­sion (IPEC) chair­per­son Lynn Mukunoweshuro said the 20 per­cent pen­e­tra­tion out­lined was achiev­able with a more con­ducive pol­icy en­vi­ron­ment that en­cour­ages sec­tor growth.

“The TSP also looked at re­view­ing some of the strin­gent in­dus­try in­sur­ance re­quire­ments. We are in the process of that (re­view­ing poli­cies), we are on an en­hanced speed.

“TSP set a tar­get to in­creas­ing in­sur­ance pen­e­tra­tion ra­tio from 5 per­cent to 20 per­cent by 2020.

“You will be hear­ing of new poli­cies very soon,” she said at a grad­u­a­tion cer­e­mony for jour­nal­ists who un­der­went a 10-month in­sur­ance jour­nal­ism mentorship pro­gramme hosted by IPEC in con­junc­tion with Zim­s­e­lec­tor.

Ms Mukonoweshuro said in­creas­ing con­sumer aware­ness and de­mys­ti­fy­ing in­sur­ance ser­vices and prod­ucts would be key in the quest to boost ser­vice up­take num­bers and achieve the 20 per­cent pen­e­tra­tion tar­get.

The IPEC chair­per­son also high­lighted some of the low hang­ing fruits for the in­sur­ance in­dus­try such as the agri­cul­ture sec­tor, adding in­dus­try cap­tains need to tap into such in or­der to broaden their cus­tomer bases.

Agri­cul­ture in­sur­ance in Zim­babwe is still low, es­pe­cially among small scale farm­ers. Ms Mukonoweshuro said cre­at­ing prod­ucts for this mar­ket as well as other SMEs would also help to boost fi­nan­cial in­clu­sion.

Low in­sur­ance pen­e­tra­tion es­pe­cially for the SMEs sec­tor is not unique to Zim­babwe alone, but preva­lent in Africa and other de­vel­op­ing coun­tries across the globe.

Ms Mukonoweshuro said this cre­ated scope for do­mes­tic in­sur­ance com­pa­nies to come up with prod­ucts suitable for this un­tapped mar­ket seg­ment, es­pe­cially putting into con­sid­er­a­tion their af­ford­abil­ity.

Ac­cord­ing to a global in­sur­ance firm, Ac­quis In­sur­ance Man­age­ment, SMEs have cited high pre­mi­ums as the big­gest chal­lenge to ac­cess­ing in­sur­ance while scope of cover and lack of aware­ness ranked sec­ond and third among the con­straints.

Ms Mukonoweshuro said agri­cul­ture in­sur­ance was im­per­a­tive given the role this sec­tor plays in the econ­omy.

“The in­sur­ance In­dus­try should es­tab­lish it­self in the agri­cul­ture in­dus­try by fa­cil­i­tat­ing a devel­op­ment of in­sur­ance prod­ucts that tar­get agri­cul­ture specif­i­cally as it is one of the main in­dus­tries that is set to de­velop Zim­babwe,” she said.

This, to­gether with em­brac­ing dig­i­tal­iza­tion will also see sig­nif­i­cant growth in the in­sur­ance in­dus­try and make Zim­babwe catch up with de­vel­oped mar­kets where ser­vice providers have on­line pro­cesses for their cus­tomers.

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