Funeral Assurers pins hope on 2019 budget

Funeral Assurers pins hope on 2019 budget

By Insurance24

HARARE,  Funeral Assurers are longing for 2019 National budget that speaks to production, which in turn increases employment levels and drive uptake of the sectors products.

“First and foremost we expect that the budget makes a strong and serious thrust towards the productive sector.

“The Minister’s focus should be aimed at reviving the economy to increase production capacity and subsequently employment levels.

“Once employment levels go up funeral assurance uptake will also go up as those in formal employment make up the bulk of our clientele base,” Solomon Chikanda, the Zimbabwe Association of Funeral Assurers (ZAFA) said.

He added that, once capacity utilisation in the industry increases and closed companies reopen, liquidity positions within organisations also improve thereby improving premium payments to funeral assurance companies.

Chikanda said the current economic situation in the country has seen some companies closing down and others scaling down due to various operational challenges.

This, he said, has resulted in a significant number of workers losing their jobs and failing to continue with their funeral policies.

“There was therefore an increase in lapses of funeral policies due to failure to pay and continue with the policy. This affected the premiums collected by funeral assurers and subsequently their liquidity positions,” he said.

On other hand, the ZAFA president indicated that raising of capital to meet the new capital levels set by the regulator has also been a serious challenge for funeral assurers under the current economic turmoil.

“New capital continued to be very elusive to the detriment of funeral assurers. The foreign currency shortage has also prevented the funeral assurers from expanding their operations through acquisitions of new funeral services assets and compromising service delivery in some cases,” said.

He noted that it is not wished that the current economic scenario continues in its state but that it improves for the betterment of the whole nation.

“We therefore remain hopeful as an industry that the economic stabilisation measures put in place by the government will yield the intended positive results for industry viability.”