Insurance Industry misses out on business opportunities

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Minerva General Manager Mr Solomon Mavuka

By Donald Tafadzwa Chidoori

The Insurance industry missed out on an opportunity to market their products at the just ended Local Government Investment Conference that was held in Victoria Falls from 17 to 21 October.

The   conference brought together over 400 participants from the Urban Councils Association of Zimbabwe (Ucaz), Zimbabwe Local Government Association (Zilga), Association of Rural District Councils (ARDC), mayors, town clerks and chamber secretaries.

The conference was meant to find ways to boost investment in Zimbabwe’s local authorities and for companies to showcase investment opportunities to local and international investors.

The conference was attended by Minister of Local Government, Public Works and National Housing, Cde Saviour Kasukuwere and Minister of State Provincial Affairs for Provincial Affairs for Matabeleland North Province, Cde Cain Mathema, captains of industry and foreign delegates.

The Local Government Investment Forum was held under the theme, ‘Repositioning Urban Local Authorities for Industrialisation, Investment Promotion and Socio-Economic Development’.

Local authorities are facing an increase in insurance claims and legal disputes as budgets and workforces are chopped and the trend for underfunding raises the risk of service failures.

Minerva Risk Advisory General Manager Mr Solomon Mavuka, said that local authorities have a lot of exposures, “they sometimes cause a lot of damage to the environment even if they are not responsible but negligence can be attached to them, and we put in place mechanisms to ensure that even if law suits come they are covered by insurance.”

“Harare City council might be accused that of dumping affluent in Lake Chivero and fish died, or a person might sue them if one falls into an open pit left after repairs by the council and breaks a leg. So we cover for such kinds of liabilities,” said Mr Mavuka.

Burst sewer pipes, delayed repairs and sewer outflows into residential areas are some exposures to risk that the local authorities face.

Local Authorities present a number of business opportunities in risk management and Insurance. Insurance companies can offer packages that include risk management advice, professional insurance packages, management of pension funds, including cover for public liability, employer’s liability, fidelity guarantee, & official’s indemnity.

Just last month Deputy Minister of Health and Child Care Dr Paul Chimedza said only 10 percent of the population had health Insurance cover, leaving more than 11 million Zimbabweans uninsured.

Insurance companies in Zimbabwe could partner with Local authorities to establish Local Government Employees Health Plan.  The Local Government Employees Health Plan makes private health insurance a much cheaper option for council employees and councillors. The plan can save members up to 45 per cent of their medical expenses by reimbursing any excess payable on hospital care.

Savings are made by choosing a product that charges the highest excess and the lowest premiums. When a member is hospitalised they are refunded any excess from the excess refund pool, which is funded by four per cent of member premiums.

Such kinds of plans have been successfully implemented in Australia, where the Municipal Association of Victoria partnered with Health Link Consultants and not-for-profit health insurer GMHBA to develop the Local Government Employees Health Fund.

The Insurance Council of Zimbabwe Marketing and PR Consultant, Ringisayi Batiya said that need to stop whining, be more aggressive and innovative if they were to survive and grow.

“Health Insurance companies should not wait for us to get sick, they should develop ways to reduce claims, for example Insurance companies should pay for Gym services for their clients to keep their clients healthy and limit their susceptibility to diseases,” she said.

Regular moderate-intensity physical action has been shown to help protect people against some diseases.

Mr Makuva said that Local authorities and the insurance industry could engage on win-win platforms only if more communication networks were created. “It is true that as the insurance industry we missed out at the opportunity to market our products, as Minerva we have Insurance service contracts with a number of Local authorities like Ruwa local board.

The conference could have given us an opportunity to extend our market base, but we have to improve on communication networks between the local authorities and us (the insurance industry) to benefit from such forums.”

There are a number of opportunities for insurance companies to work closely with local authority bodies to provide guidance on managing their risks.

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