ZIMBABWE’S insurance industry continues to offer huge opportunities for innovation in product offerings, as there is still a lot of room for growth in the sector within the region, an official with a regional insurance organisation has said.
BY KUDZAI CHIMHANGWA
According to the Insurance and Pensions Commission (Ipec), Zimbabwe still has a very low insurance penetration rate below 5%.
A majority of people in rural areas and the informal sector do not have any access to insurance services.
Organisation of Eastern and Southern Africa Insurance (OESAI) marketing consultant, Chipo Mapungwana said the uptake of some insurance products for both corporate and individual classes in Eastern and Southern Africa were still relatively low.
“When we analyse the products that are offered in some of the more mature markets, such as South Africa, and Nigeria for example, and overseas markets, there are huge opportunities for innovation in the types of products we offer,” said Mapungwana. “The issue of capacity in reinsurance continues to be a challenge.”
However, a number of insurance companies are currently seized with changing public perception about insurance, policies offered and their terms after most policyholders lost their contributions due to hyperinflation and the adoption of the multi-currency regime in 2009.
Mapungwana said that even with the current economic challenges, the insurance sector was doing well, as evidenced by the premium growth in some of the insurance firms, the number of new entrants in the market, new products and distribution channel growth over the past few years.
“The market also needs to continue to increase reinsurance capacity so as to curtail companies looking for capacity outside the country,” she said. “This will also encourage growth and local confidence in the sector.”
OESAI is a regional, member-based insurance trade association, providing a platform for capacity development, insurance networking, the sharing of best practices, product development, and advocacy for the interests of insurance companies across the East and Southern African Region.
OESAI chairman, Lawrence Nazare said that one of the key objectives of the organisation was to reverse capital flight and the export of wealth from Africa through excessive dependency on overseas re-insurance capacity.
“OESAI is reconstituting and repositioning the OESAI insurance and re-insurance pool to ensure that it becomes a strategic provider of alternative reinsurance capacity, for both special risks and other business lines where our local markets have a capacity deficit,” he said.