THE funeral assurance and insurance sectors are on the rebound as more clients continue to gain confidence in the industry, Insurance Institute of Zimbabwe (IIZ) president Chomi Makina has said.
BY KUDZAI CHIMHANGWA
Makina said a number of clients had lost confidence in the insurance sector, generally because of the problems associated with the hyperinflationary era and continued erosion of policy values.
“Sums assured are now realistic and people see things happening on the ground. The inception of the multicurrency regime has contributed towards restoring that confidence,” he said.
“But there still exists a section of the community that is skeptical. On the funeral assurance side we had challenges emanating from the hyperinflationary era. We have had to carry a book which did not have reserves in terms of the multicurrency regime.”
The sector has over the years been grappling with loss of confidence and scepticism.
Makina said life policies were not very popular these days, as more people prefer funeral assurance policies.
“When one gets a funeral or insurance policy, the insurance company assumes a liability, so you have got deferred liabilities which need a reserve, but funeral assurance companies have continued to shoulder on and mitigate against rising challenges with few problems,” he said.
Turning to the contentious conversion exercise, Makina said there was need for the Finance ministry to determine and set a rate in light of use of the multi-currency system.
After government officially adopted the new currency regime in 2009, almost every major institution in the country had a separate rate.
“A decision should have been made in this regard because in the absence of a rate, how do you convert? This is a problem that the banks also have, they don’t have a rate,” he said.
Experts say insurance companies need to use conversion rates that were applicable at the time, rolling incrementally at different times of the unexpired term of the policy.
Makina, who is also the group chief executive officer of Moonlight Group, said his company had clinched a deal with a South African based company to repatriate bodies, as the cost was currently beyond the reach of many Zimbabweans.
Makina said Moonlight consulted with regulatory authorities before signing the deal, while the partner company was registered with the South African Financial Services Board.