Tuesday , June 28 2022

The economic crisis reduces the penetration of insurance


The current economic troubles plaguing the country continue to weigh on insurance penetration, with market players huddled in brokers, businessdigest studied.

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Insurance brokers are consequently cushioning themselves from risk by participating in low-risk areas.
Despite low penetration ratios, the chairman of the Association of Insurance Agents of Zimbabwe (IBAZ) Marketing Committee, Mapiye Chigorondondo said this week there is not enough big business risk in the country.
It saw brokers participating in small, personal insurance and micro insurance products instead of large-risk projects.

Yegorandondo said that the sector is struggling with a number of challenges stemming from the difficult economic environment.

"Naturally, when consumers and businesses are under pressure, insurance is not at the top of the mind for many.It has become increasingly difficult to maintain the adequacy of insureds (insured) values, so consumers are beginning to ask the value of insurance where prices are rising regularly, Find themselves under the insured.The affordability of insurance where one should constantly review the amounts insured up and pay additional premiums also becomes a question, "he said.

Chigorondondo said insurance agents face challenges when collecting premiums from customers due to cashflow challenges.

"With most businesses facing cashflow constraints, the collection of premiums is not easy.The size of the market is not growing, so it also leads to limited growth as some of the products that are available in growing economies are difficult to implement and sell in this country." As a branch, that means we end up lagging experience And exposure compared to practitioners that are specialized in economies that are growing.The market is gaining even the middle level, "he said.

Chigorondondo said while much development and improvement has taken place, the availability of insurance products is not yet available, adding that insurance requires a lot of education.

"Most people are familiar with funeral insurance, but beyond that many are not well exposed to the benefits of insurance in other areas of life." The perception with many is that insurance is also very expensive for the rich.The other reason is distribution channels.Insurance also thrives where there are high levels of Official employment With high levels of informal employment, this makes the penetration of insurance much more difficult.Inclusive income is also limited and therefore not many people worry about insurance.

"We intend to continue the public insurance campaigns we have already started, for example, IBAZ road plans, advertisements, flyers, presentations to various business organizations, among others."

Chigorondondo said the situation also presents opportunities and solutions for customers who want to take insurance in other currencies and can afford it since Zimbabwe is a multi-currency market.

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