Insurance sector risk-responsive — Survey
Ishemunyoro Chingwere Business Reporter
The country’s insurance sector has made a positive impression on the recently concluded Zimbabwe Integrated Capital and Risk Project (ZICARP) survey which shows that 95 percent of the industry is willing to take up risk mitigation techniques.
The survey was launched by the insurance and pensions regulator, Insurance and Pensions Commission (IPEC), in March and seeks to develop a solid insurance regulatory and supervisory framework to enhance policyholder protection.
This is especially important as policyholder confidence in the sector plunged on the back of the value of policies having been eroded when the economy dollarised in 2009 due to hyperinflation that beseeched the economy then.
The survey was conducted by African Actuarial Consultants (AAC).
It was guided by four main themes namely the risk culture, risk governance standards and implementation, risk management processes and the actual risk management operations.
Presenting the survey results in Harare yesterday, AAC managing director Tinashe Mashoko said while compliance gaps still exist in terms of IPEC circular number 11 of 2016, there is however, evidence that most firms are implementing good risk management practices.
Responding to organisations’ responsiveness to new risk mitigation techniques under risk management processes, “. . . 95 of the respondents were positive that their organisations are looking to introduce new risk mitigation techniques,” said Mr Mashoko.
He added that just two firms had said they were not looking to introduce any new such measures and consequently did not name the companies as per guidelines of the survey.
On how the new techniques will be introduced Mr Mashoko said, “. . . most of the entities have some idea on how they are going to introduce new risk mitigation techniques (and) in summary, for risk management processes, it was generally positive to note that the risk for which economic capital was estimated by most entities was operational risk.”
The survey, however, found out that there was a poor understanding of risk by insurance companies’ employees.
Of the sampled firms (25) 44 percent indicated that their staff had average understanding of risk which could leave policy holders in danger of failing to get required information from insurance companies.
Of the 25 firms, two actually indicated that their staff had poor understanding of risk and both of these were in the short-term insurance sector.
The survey thus notes that there is need for further on the job training in risk management.