THE Insurance and Pensions Commission (Ipec) says Zimbabwe’s insurance penetration rate is much higher than the figures reported by PricewaterhouseCoopers (PwC), which ranked the industry fifth in Africa.
BY TATIRA ZWINOIRA
PwC’s report — titled: Ready and Willing: African insurance industry poised for growth — released recently, put Zimbabwe’s insurance penetration rate at 4, 9%.
South Africa was ranked the highest with a penetration rate of 16,99%, followed by Namibia at 6,69%, Lesotho (4,76%), and Mauritius (4,18%).
However, Ipec acting commissioner Blessmore Kazengura said the figure of 4,09% was understated because the National Social Security Authority (NSSA) and medical aid societies do not fall under the purview of the regulatory body.
“We wouldn’t say Zimbabwe’s insurance penetration ratio is that bad, especially in the context of it being fifth in the whole of Africa given the decade of macroeconomic challenges that we have faced prior to 2009,” he said.
“Besides, in our view, the figures being reported are understated since they are largely drawn from insurance activities under the purview of Ipec.
“If you were to add statistics relating to the insurance business conducted by NSSA and medical aid societies, which currently do not fall under the purview of Ipec, the penetration ratio would be higher than 4,09% quoted here.
“This means that we would be somewhere close to South Africa and Namibia in terms of the rankings in Africa.”
In February, Ipec began discussions with Cabinet to have NSSA and medical aid societies brought under its ambit since their business is categorised as “insurance”.
Ipec says Zimbabwe’s life assurance sector achieved a gross premiums written (GPW) of $360,3 million while the non-life industry underwrote $236,47 million.
Both these figures are about 3,5% of Zimbabwe’s gross domestic product.
“The commission came up with the Microinsurance Framework in 2017, which facilitates the introduction of insurance products that are tailor-made for those in the informal sector or with irregular income.
“Already, indications are that there are over two million policyholders of microinsurance products,” Kazengura said.
“In addition, we are in the process of finalising a Micropensions Framework, whose thrust is to support development of pension products for the informally employed.
“Furthermore, the commission has recommended reforms to the laws governing insurance and occupational pensions to enhance consumer protection, effective supervision of the insurance sector and facilitate growth of the industry.”
PwC said insurers already present in African countries would need to innovate and use new distribution methods in order to target the underinsured.