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.