The Insurance and Pensions Commission (Ipec) says there is need for the country’s tax authorities to give tax breaks to companies that offer microinsurance and micro pensions products, to help improve financial inclusion for low-income communities.
Microinsurance products are cost effective, institutionally simple and designed specifically for the poorest section of society.
- Moonlight Funeral partners Old Mutual to launch funeral plan for low income earners
- Moonlight partners a syndicate of firms to transform lives of unbanked Farmers
- Funeral Cash Plans dominate new micro-insurance products
- CBZ Life offering low cost holiday accident cover
Giving a Keynote address at the Tax and Business Interface Week, yesterday, Ipec Commissioner Tendai Karonga said that the challenges of financial inclusion could be overcome if insurance firms targeting the under-privileged clients could be given tax incentives.
“Given the critical roles played by the financial sector to the economy, the tax practices applicable to this sector should not inhibit the same sector’s ability to perform its respective role.
“We urge the tax authorities to contribute to the financial inclusion agenda by offering tax incentives to players offering microinsurance and micro pensions products. Such incentives may be in the form of tax holidays and tax exemptions,” said the Commissioner.
Since Ipec launched the microinsurance framework to guide the operations of microinsurance products there has been an influx of micro insurance products from the supply side however the demand side is still subdued.
Ipec says the uptake of micro insurance products has been dampened by the lack of awareness and knowledge of the concept of Insurance.
Speaking to Risk Insure Zimbabwe, Ipec Head of Prudential Supervision – Puparai Togarepi, said that Ipec was going, starting this October, to invest in country wide micro insurance awareness campaigns to educate the public about micro insurance.
“One of the reasons insurance penetration rate is low in Zimbabwe is as a result of lack of consumer education. Therefore, from October this year, microinsurance awareness roadshows will be conducted throughout the country,” said Togarepi.