The insurance and pensions industry has shown a great level of resilience despite the deep-seated economic challenges that has also been worsened by the emergence of Covid 19 ,Insurance and pensions commission has said.
Staff Reporter
The Pensions Sector recorded growth in asset base ,that is, an increase of 843% from June 2019 to June 2020, which is above the June annual inflation rate of 732%.
The insurance Sector paid about Z$726 million in claims from April to June 2020 while the Pensions Sector paid benefits worth Z$483 million from January to June 2020.
IPEC commissioner Grace Muradzikwa today told a 2020 journalists mentorship program meeting that the insurance sector was battling with insurance fraud, high levels of premiums debtors as well as liquidity challenges.
The performance was also despite the insurance industry struggling low confidence mainly owing to loss of value as a result of hyper inflationary legacy issues as well as low uptake of insurance products.
Muradzikwa said a recent baseline survey revealed that only 34% of the population in Zimbabwe have insurance of some sort and 76% was in respect of funeral assurance policies.
On the other hand the pension’s industry y is suffering reduced disposable income owing to company closures, retrenchments and lack of formal employment opportunities
High contribution arrears which are now are now topping Z$887 million and unclaimed benefits of Z$196 million for 53,000 members were also noted to be a challenge for the pensions industry .
“Notwithstanding the macroeconomic challenges and the global Covid-19 pandemic, the industry remains resilient as indicated by reduced disposable income owing to company closures, retrenchments and lack of formal employment opportunities. The industry is capital intensive as opposed to labour intensity. The Pensions Sector had growth in asset base (an increase of 843% from June 2019 to June 2020, which is above the June annual inflation rate of 732%),”she said.
Muradzikwa said the impact of covid-19 on the insurance and pension sector could not be underscored with reduced uptake of insurance and pensions products, reduced rental income as tenants are requesting for rental holidays or discounted rentals as well as the exacerbation of Contribution arrears by Covid-19.
There has also been a long turnaround times in processing benefits, and increased expenditure to capacitate employees from working from home.
In the face of all these challenges she urged the industry players to invest in innovative products that suit the new normal.
