Over 2 million covered by micro-insurance products: IPEC

Over 2 million covered by micro-insurance products: IPEC

By Insurance24

HARARE, Over 2 mln Zimbabweans are subscribed to various micro-insurance products being offered largely as a result of their affordability.  Several life assurers and health insurers have over the past 2 years developed micro-insurance products that range from as little as 50 cents.

Nhau Chivingira of the Insurance and Pensions Commission (IPEC) at a Zimselector mentoring program for journalists indicated that IPEC was so far satisfied with the rate micro-insurance products has evolved.

“More than 2 million people are holders of the micro-insurance policies and this is more than any other country in Africa,” he said.

These products have been largely come through as mobile products with several companies also riding through the mobile phone platforms to offer the services.

IPEC early this year launched the micro insurance framework that is in line with the national financial inclusion agenda targeting the previously excluded population such as small-to-medium enterprises, peasant farmers, vendors and other low income earners.

The policy framework entails development of micro-insurance products that are affordable to the lowest income earner. In that regard, several companies have introduced such products with minimum rates of as low as 50 cents while the payout can be as high as $500.

According to the FinScope survey done in 2014, 70% of adults in the country were not insured. Of the 30% with insurance, 77% of them are funeral insurance which shows a huge gap on the insurance uptake.

Zimbabwe’s insurance penetration ratio is expected to increase to 20 percent from the current 3, 6 percent in the next two years largely driven micro insurance.

Meanwhile, in line with that thrust, government has gazetted two Statutory Instruments allowing IPEC to register microinsurance companies and effectively peg their minimum capital at $300 000 while setting levels of fees and levies for the sector.

This has been done through amendments to the Insurance Regulations and the IPEC Act and comes years after Zimbabwe started working on a framework to regulate and formalize operations of micro-insurers, targeting low income earners.

The instruments, cited as the Insurance (Amendment) Regulations and Insurance and Pension Commission (Levy) Regulations also sets levels of registration fees and levies.