Property Reporter
THE funeral assurance industry is targeting to venture into property development as the sector seeks to diversify its fortunes. This comes after several financial institutions and insurance firms have followed the bandwagon of property development as they seek to diversify their earnings base. The property market, while depressed, has been offering better returns to investors. Zimbabwe Association for Funeral Assurers president Mr Solomon Chikanda, told The Herald Property that there is a new thrust by funeral assurers to register their footprint in the property market.

“It is our new thrust as funeral assurance companies to venture into property development considering that insurance companies have since consolidated their presence in that front.

“Besides the obvious property development, we are also looking at embarking on a massive mortuary development which is also part of property development. This mortuary development will be done on a one stop shop model which will also include office among other developments,” said Mr Chikanda.

“The property sector is quite lucrative and presence in that sector must be enhanced to diversify our earnings,” he said.

Government has been encouraging private land developers and community based programmes such as housing trusts and housing cooperatives to partner local authorities in property development.

To date , housing cooperatives have managed to construct close to 95 000 housing units between 2010 to 2015, an initiative that has worked to reduce the country’s housing backlog currently at about 1,25 million.

The current initiative by funeral assurers comes at a time when they are pleading with Government to be spared from the proposed increased minimum capital requirements of $2,5 million from $1,5 million, highlighting that the majority of their business is purely micro insurance in nature.

The move by Government announced by Minister of Finance and Economic Development Patrick Chinamasa in his 2017 National Budget, is aimed at cushioning policyholders from weak and insolvent insurers.

Mr Chikanda said ZAFA is committed to support Government projects and efforts in rebooting the economy through compliance with prescribed assets requirements.

Through the guidance and support of IPEC and Ministry of Finance and Economic Development, the funeral assurance industry continues to surpass expectations as total assets grew to $61 million as at December 31, 2016 from $51 million as at December 31,2015.

According to IPEC reports the funeral assurance industry’s premium income grew from $36 million in 2015 to $38 million for the year ended December 31, 2016.

In addition, Mr Chikanda said the association has identified a serious skills gap in the industry that may threaten the provision of quality and professional funeral services.

He said the business operating environment is changing on a daily basis bringing with it new stakeholder needs and expectations.

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