Brokers say some Banc assures and agents shortchanging consumers on rights to choice

Brokers say some Banc assures and agents shortchanging consumers on rights to choice

Nelson Gahadza

HARARE, The Insurance Brokers Association of Zimbabwe (IBAZ) says conditional selling of insurance being practiced by some banks goes against consumer rights to choice, as clients should be given an option to choose insurance brokers of their choice when they are being given loans.

IBAZ in a statement said there are certain attributes to identify when selecting a broker and professional advice on insurance matters should be left to IBZ members who are qualified in that field and have professional indemnity cover as a fallback position to clients in case of professional malpractice.

“Members of the public are therefore encouraged to use IBAZ members when taking out insurance as this will guarantee them with unbiased, professional expertise that secures the best coverage for their particular needs as the best practice,” says IBAZ.

Currently there are 24 insurance brokers being regulated by the Insurance and pensions Commission (IPEC).

Insurance brokers earned $1.4 mln during the quarter ended 30 September 2017, which translate to an 81.22% increase from $77 000 same period in 2016 and this was driven by a 10.01% increase in other income for the quarter.

During the period, there were 32 insurance brokers with only two namely Rainbow Insurance Brokers and Ambassador Insurance Brokers reporting capital positions that were below $100,000.

The brokers wrote $72.34 million in business and this was 2.67% higher than the $70.46 million reported for the comparative period in 2016. Insurance brokers recorded $11.95 million net brokerage commission since 1 January 2017. This was a 0.55% increase from $11.88 million reported for the nine months ended 30 September 2016.

Meanwhile, IBAZ said apart from representing the interest of clients, IBAZ member’s adhered to the Insurance Brokers Code of Practice which sets out the minimum service standards.

“Unlike insurance agents such as Banc assurance and sole agents who represent insurers, IBAZ members will stand in for the client in event of claim,” it said.

IBAZ added that while Banc assurance as well as sole agents is heavily compromised since they deal with only one insurer, IBAZ members are independent and they deal with the entire market selecting the best insurer for one.

IBAZ said its members are regulated by IPEC and meet minimum standards such as prescribed capitalization.

During Q3 2017, two insurance brokers namely, Rainbow Insurance Brokers and Ambassador Insurance Brokers reported capital positions that were below $100,000. The capital positions for the insurance brokers ranged from $ 15,175 to $2.37 million.

The asset base for insurance brokers marginally decreased to $29.47 million for the nine months ended 30 September 2017 from the $31.15 million reported in the comparative period of 2016. This was mainly as a result of a decrease in premium receivables from $5.72 million reported at 30 September 2017 to $3.66 million recorded under the current quarter.