Statistics show that 70 percent of the Zimbabwean population is uninsured, 60% of public transport vehicles are not properly insured, and that the insurance penetration rate and consumer confidence are at their lowest.
By Tafadzwa Chidoori
Has insurance lost value, are pension funds no longer important in our lives?
Well insurance and pensions are still vital in mitigating financial risks. People just need to be reminded of this relevance and importance says the Insurance and Pensions Commission (Ipec).
It is based on this premise that Ipec, has joined forces with insurers, and is coordinating an insurance awareness drive that is designed to remind and help educate Zimbabweans about the importance of insurance and encourage them to update their insurance status.
“It is the responsibility of Ipec to ensure the insuring public is adequately and always informed of the products and services they get from insurers,” Ipec Head of Prudential Supervision – Puparai Togarepi, told risk insure Zimbabwe.
“It is (also) our duty to educate existing and potential policyholders and fund members about their rights and obligations,” he added.
Ipec has so far conducted three Awareness campaigns, a belated Insurance Awareness Day on 01 July 2017 in Harare CBD, the Pensions Awareness Day commemorations which were held on 15 September 2017 and 22 September 2017 in Mbare and Bulawayo CBD respectively.
“For the Pensions Awareness campaigns, the thrust is to conscientise people about the importance of saving for retirement. It is important that one secures his/her retirement when they are still working by saving through a pension scheme,” Mr Togarepi said.
According to a 2014 Finscope survey only 30% of Zimbabweans are insured and the majority of this population – 70 percent – is on funeral assurance. The low uptake of insurance especially life insurance has been mainly attributed to the loss of values for life policies and pension schemes when Zimbabwe adopted the multi-currency regime.
“As such people need enough information before taking up life policies and pension schemes. It is for that reason that we use these awareness campaigns to educate people that notwithstanding the aversion they may have towards insurance and pensions owing to the loss of values, insurance and pensions are still vital in mitigating financial risks. We also tell them about the regulatory measures that we are taking to ensure that policyholders and fund members’ rights and interests are protected,” said Togarepi.
Zimbabwe’s insurance penetration rate has been on a free all from a high of 6% in 2004 to a current low of 1.5%.
“One of the reasons insurance penetration rate is low in Zimbabwe is as a result of lack of consumer education. Therefore, the campaigns will enhance understanding of the importance of insurance.We anticipate an increased penetration rate as potential policyholders would have enhanced understanding of the services and importance of insurance,” said Togarepi.
The regulator is also making regular radio appearances on a number of stations to augment its awareness campaigns. Ipec also has a running radio programme on Star FM every Wednesday from 7:30pm to 8:00pm dubbed “Inside Insurance and Pensions” where they talk about insurance and pensions.
While Insurance Awareness Day commemorations for this year were held in Harare only while the Pensions Awareness Day celebrations were conducted in Harare and Bulawayo only. There are plans to reach out to other provinces from next year.