CBZ Risk Advisory Unit to help clients prepare for risks

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CBZ Holdings has established a risk advisory service unit, as it moves to aid its clients to choose the most appropriate insurance cover and the best risk management partners.

By Tafadzwa Chidoori  

CBZ group chief executive officer, Never Nyemudzo, early last week told guests and journalists gathered at the launch of the unit, that the advisory unit was a step towards helping their clients prepare for risks.

The unit was established as the insurance industry is reeling from the negative impact that is being caused by bogus insurance brokers and agents.

According to market reports only 30% of Zimbabweans are insured and this is dominated by Funeral Insurance representing some 70% of premiums, with third party motor vehicle coverage alone accounting for half the sector’s revenues.

Negative perception and attitude towards the industry as well as low disposable incomes amongst other things have also resulted in a dip of the insurance penetration rate from a high of 5.7% in 2004 to 1.5%, its lowest since independence.

A number of insurance companies have also either been suspended or deregistered by the Supervisory authority (Insurance and Pensions Commission – IPEC) for failing to meet minimum capital requirements or for failing to pay claims. The move by CBZ Holdings will definitely steer its clients towards reputable companies.

“This company was established to help our clients understand the risks they are exposed to and how to cost-effectively transfer those risks to an appropriate insurance company, which will be able to settle the claim when the event insured for happens,” Nyemudzo said.

CBZ Risk Advisory is a registered insurance broker; it is licensed and regulated by the Insurance Supervisory Authority – Insurance and Pensions Commission (IPEC).

The unit is already well­ capitalised at $500 000 against regulatory minimum requirements of $100 000.

CBZ is the largest bank in Zimbabwe in terms of market share of deposits, and one of the biggest commercial banks in the country its entry into risk advisory services is expected to have a significant impact on the insurance penetration rate.

The new unit has three service centres; Short Term Insurance Broking and Risk Advisory Services, Group Employee Benefits and Pensions Consultancy and Individual Life Financial Planning Services. This gives the unit the ability to have product diversification, improve distribution channels and provide intense competition in the industry which is expected to drive growth in new niches areas like assistance coverage.

“A closer look at the dynamics in the insurance sector and the evolving economy in general, naturally call for a further strengthening of our insurance portfolio through investment in infrastructure that supports the distribution channels, product development and customer interface,” said Nyemudzo.

This can help the industry to navigate the expected risks and challenges precipitated by the drop in disposable income, spending on insurance and poor perception of the insurance industry by the public.

“The company is joining six other strategic business units, which are the bank, building society, asset management, long-term insurance, short-term insurance and property and all will work in a complementary manner in ensuring that the client enjoys speed and convenience,” Nyemudzo said.

This also brings to three, the number of units in the insurance cluster after CBZ Life and CBZ Insurance.

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