CORONATION Financial Holdings group chief executive officer Lance Mambondiani (pictured) has called on the insurance industry to leverage technology to increase the national penetration rate.
According to current statistics, the insurance industry’s penetration rate remains low, at 3%, with most firms gearing their product offerings to the formal sector.
This comes despite more than 50% of economic activities being informal.
In addition, insurance penetration remains very low in Zimbabwe due to legacy issues and affordability of the products due to economic headwings.
Speaking at the ongoing Insurance Institute of Zimbabwe (IIZ) Winter School in Nyanga yesterday, Mambondiani said the uninsured and financially-excluded presented a substantial gap in the financial safety net and exposed individuals and families to unnecessary risks.
The industry needed to leverage several strategies to stay afloat, Mambondiani said.
“The industry needs to leverage technology expanding digital financial services and promoting mobile insurance to reach underserved populations. There is also a need for public-private partnerships,” he said.
“This includes collaborating with government, financial institutions and insurers to facilitate the development of inclusive financial solutions. The industry needs to invest in financial education programmes that empower individuals to make informed decisions about savings, credit and insurance.”
Mambondiani added that there was also a need for regulatory support, stressing that a conducive regulatory environment for insurance and financial services could stimulate innovation and competition.
Experts say there is a nexus between financial inclusion and insurance as they create the foundation for individuals to access the industry’s products.
Mambondiani said offering affordable insurance products tailored to low-income segments could help protect livelihoods and assets, in addition to increased insurance penetration.
He said players could also develop insurance products linked to weather-related events to support agricultural communities and mitigate against risks.
“Integrating insurance concepts into financial literacy programmes can enhance public understanding and demand for insurance,” Mambondiani said.
He, however, bemoaned the glaring challenges in implementing inclusive insurance in Zimbabwe.
These include lack of awareness, affordability, infrastructure challenges, trust, literacy issues and potential policyholders being unaware of insurance benefits and options.
“But digital marketing and education platforms can help solve this, for example, through the use of mobile apps and social media campaigns to educate the public about insurance benefits,” Mambondiani said, adding that the use of blockchain technologies to ensure transparent and secure transactions and building trust among users were key to increasing the insurance rate.
IIZ general manager Davison Choeni said in a recent interview that the institute would be aiming to establish additional campuses and learning centres across Zimbabwe to make its insurance education more accessible to a wider population.
“This will involve leveraging digital and hybrid learning models to reach students in both urban and rural areas. Right now, we plan to introduce more specialised insurance programmes, such as marine insurance, agricultural insurance and micro-insurance, to cater to the diverse needs of the Zimbabwean market,” he said.
“These programmes will be designed in close collaboration with industry experts to ensure they address the specific skill gaps and market demands.
“The institution envisions establishing a dedicated ‘Centre of Excellence’ for insurance research within the IIZ, which will focus on conducting industry-relevant research publishing studies and providing ‘thought leadership’.
“This centre will serve as a hub for innovation, knowledge sharing, and collaboration between academia, industry and policymakers.”