Enacy Mapakame Business Reporter
The Insurance and Pensions Commission (IPEC) is targeting insurance penetration to reach 7 percent by 2022 compared to the current 4,7 percent on the back of an anticipated economic growth. Zimbabwe remains in top five in the region in terms of insurance penetration.
The growth will be driven by robust awareness programmes for the market, while various players are coming up with products that suite the current market trends, characterized by a booming informal and small to medium enterprise (SME) sector.
IPEC public relations manager Lloyd Gumbo, said insurance penetration was still low but expected to see an increase in the uptake of insurance products in line with the anticipated economic boon that will be driven by agriculture and mining, which will result in more disposable incomes.
“We are expecting to see it increase in the coming few years,” he said in an interview on the sidelines of the Zimselector insurance journalists mentoring programme in Harare last week.
“In terms of strategy for insurance, we are looking at 7 percent, we want people to get more insurance, we are not saying they should give money but to ensure their assets are protected.
Currently, penetration is at 4,7 percent ahead of the region’s average of 3 percent with most insurers in Sub Sahara Africa targeting mainly the group insurance market.
The highest insurance penetration in the region is South Africa at 15 percent while Zambia and Mozambique is estimated at 3 percent and 1,3 percent respectively.
Angola and Kenya have insurance penetration at 1 percent and 3 percent respectively, according to Willis Towers Watson report on Sub Saharan Africa Insurance.
According to a 2014 Finscope survey, 30 percent of Zimbabweans have insurance. These are, however, mainly skewed towards funeral policies and Mr Gumbo said there was need to increase awareness as well as more products that suit the needs of the current market.
He said while people had general knowledge on insurance, this did not translate to uptake due to numerous challenges, which created scope for the sector to craft more products that attract the market.
Like the entire financial services sector, insurance in Zimbabwe also suffered confidence challenges arising from 2009, when the economy dollarised, eroding values of several investments such as bank balances.
Low disposable incomes have also been a challenge as people do not prioritise insurance.
“In terms of understanding, people know about insurance but the uptake is the challenge. Others have confidence in the sector but do not have the resources.
“Right now, the majority have funeral policies and not other insurance products.
“We want people to take up insurance products, not to just make them pay but it is for their security,” he said.
The sector, however, coming up with products that also cater for the informal sector especially those in agriculture on the back of increasing weather related disasters that have destroyed crops and livestock.