Golden Sibanda Senior Business Reporter
INSURANCE companies have predicted tougher times ahead and have dismissed workers’ demands for a salary increase. The companies recently dismissed the employees’ demands for a review of salaries for the second half of the current financial year, citing unfavourable business and economic conditions.
Workers had proposed minimum salaries of US$750 for the least paid worker and transport allowance of US$100, housing US$270 and overall salary increase for all workers of 80 percent.
They also wanted 16 percent progression within grades and progression of 22 percent within bands of insurance workers.
Workers based their proposals on the fact that the insurance sector was one of the most respected in the country due to “its strategic nature to steer economic growth”.
The Insurance Employees Union of Zimbabwe said: “It is high time that employees in the sector should afford to smile due to the introduction of realistic and decent salaries.”
But the insurance firms have resisted pay hikes and want the minimum to remain at US$300, housing allowance at US$35 and transport allowance of $44, effective since January 2012.
The employer’s sentiments are captured in a document containing minutes of the negotiating committee meeting held between the parties on June 18, 2012.
The Insurance Employers’ Association of Zimbabwe said the previous collective bargaining agreement, which was a result of arbitration, awarded workers a 3 percent hike above inflation.
“Other sectors’ collective bargaining agreements running for the whole year are far less than the (insurance industry) minimums, which are second only to the banking sector,” said IEUZ.
The representative union for insurance firms argued that the sector was still on a recovery path and was experiencing expense and claims ratio higher than the standard 10 percent.
The union also hinted that national economic growth projections would be reviewed downwards due to political uncertainty, causing further shakes in the economy.
Moreover, insurance firms postulated that serious challenges to sustain economic growth were going to emanate from rising imported inflation, in view of high oil and food prices. They also cited Government failure to realise revenue targets, liquidity constraints, stifled inflow of foreign funds, power and utility constraints as factors that would affect economic growth.
“The non-performance of stock and property markets has resulted in limited growth of investment income, which could assist the sector on revenue and management of claims. IEUZ said the cost of labour, at 60 percent, outstripped  revenue, and businesses were running on capital to keep afloat.