Insurance sector challenged to tap into non-traditional products
Own correspondent
Vic Falls- Minister of Public Service, Labor and Social Welfare Sekai Nzenza has called on the insurance sector to employ innovation and tap into the non-tradition micro insurance products to as a solution to massive company closures among a plethora of problems the sector is facing.
The prevailing economic situation has seen a number of companies closing down leading to a ballooning of the informal sector.
The insurance industry is looking at attaining a 7% penetration rate by 2022, from the current rate of 4.7%.
In a keynote speech read on her behalf at the Insurance Institute of Zimbabwe (IIZ) in Victoria Falls yesterday Nzenza said the sector needed to strategically and quickly get the industry and the economy out of these dire straits.
“These closures have compounded the unemployment challenge, hence a growing informal sector. This is now calling for innovation to tape into non-traditional micro-insurance products.
“The informal sector needs insurance, and this we must provide otherwise our failure to
provide viable options will only lead to a situation where the informal sector establishes systems that work for them in their underground economy,” she said.
She said such a system runs against the grain for the National Vision 2030. Your role in providing designs for new financial products that cater for the self-employed and informal sector will definitely encourage technological innovativeness particularly in the areas of micro-insurance products.
A buy-in on the new financial products will hinge on our ability to mobilize insurance savings from the people, and at the same time be able to deploy the same back to the people, timeously and with as little hassle as possible.
This is what will build and renew public trust in insurance business,’ she said. Nzenza said the challenges faced by the sector are not new but with focus, determination and complementarity of public and private policy initiatives, the industry will be able to weather the storms, be able to adapt to change and thus meet the set targets.
“This is now calling for innovation to tape into non-traditional micro-insurance products. Today, your sector is facing a plethora of challenges due to the sudden change in asset values caused by the prevailing macro-economic environment.
“We do not like this either. This problem is not unique to Zimbabwe. Such cyclical trends are inherent in the global economy, but we need to strategically and quickly get the industry and the economy out of these dire straights as fast as we can,” she said.
Nzenza said all is looking up to the policy reforms to be announced soon by the Ministry of Finance and Economic Development, and I hope that as an industry, you have communicated not only your
concerns to the Government, but proposed solutions. I sincerely hope and trust that there is genuine
engagement that will lead to business growth in line with local, regional and global trends,” she said.
Nzenza Said government notes with concern the current negative perception that prevails in the economy about insurance adding that a serious collective effort is required to bring about positive change through extensive use of awareness programmes, whilst ensuring that when risk falls upon a member, risk mitigation takes minimum time delay in a proficient manner that makes everyone see the beauty of insurance.
“As a Government, we further note with concern a developing and growing trend of the fact that some of us are taking insurance cover with foreign vis-a-vis local companies. My special message to you is that let us be honest with ourselves in terms of addressing the push
factors that are driving business away from us to our neighboring or foreign countries. Those challenges, whether they are to do with our industry or Government policy, they must be brought to the fore for discussion and redress,” she said.
