Insurers also prone to price hikes
By Insurance24
HARARE, The Insurance Brokers Association of Zimababwe (IBAZ) says the current seed hikes which is likely to result in low production will not spare the insurance sector as it will translate in low insurance uptake.
Zimbabwe is struggling with price hikes in all sectors but seed prices are threatening the viability of the sector.
Government last week however ordered seed prices to be slashed by slashed by 50% last week analysts says it’s not enough and will definitely reduce production.
“If farmers are not going to partake in farming this season owing to high input and operational costs it also means we cannot provide insurance and our services where there is no crop to talk about. It
will result in less business for us,” he said.
IBAZ chairman of the marketing committee Mapiye Chigorondondo said farming is an area for growth for the insurance sector however small scale farmers still need to be educated on the importance insuring
their crop as there is large gap when compared to commercial farmers.
He said more education and engagement with farmers will create a hassle free claims settlement environment.
“It’s an area of growth for the broking industry. There is still a high number of farmers who require education on insurance products and services and the benefits they can derive from our industry. Many
commercial farmers are aware of insurance and to a great extent take up insurance.
However with small scale farmers there is still a lot of work to be done to educate them so that they realise the value of insurance in their businesses. Some of the farmers are yet to graduate their operations into businesses therefore they are yet to embrace the role insurance plays in their activities,” he said.
In Zimbabwe, uptake of insurance services by farmer is generally low as farmers largely view insurance as an expense rather than a necessity to cover for future risk.
Agriculture insurance uptake dipped as the new farmers did not value much into insurance as a result of the land reform programme where a lot of commercial farmers lost their land.
Agriculture is a source of livelihood of more than 40% of Zimbabwe’s population. Insurance can play an important role in securing farmers’ livelihoods and boosting the efficiency of the agricultural sector.
