THE Insurance and Pensions Commission (Ipec) insurance and micro insurance director Sibongile Siwela says confidence in the industry is at worrisome levels.
Siwela made the remarks at the just-ended two-day 2024 Insurance Institute of Zimbabwe annual conference held in Victoria Falls this week.
In her remarks, she said Zimbabwe’s economic fragility was shrinking traditional insurance.
This economic fragility is caused by a host of challenges, including currency volatility, power and water shortages, depressed consumer spending, production challenges, rising cost of living, low foreign direct investment, corruption, declining infrastructure, high informalisation, policy inconsistency and bureaucralic bottlenecks.
“On the local front, we have economic fragility in the life and educational episodes, as we know. We do have low confidence in the strength of the life and pensions industry and a low formal employment rate of about 29%, no disposable income, so this is shrinking traditional insurance,” Siwela said.
“And indicators of the monopolies, it’s impacting us as well, as well as the infrastructure. On the employment profile, we see that the informal employment rate is growing at an uneven rate, and yet the formal employment rate is not growing at all.”
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Hence, during the conference, transparency was highlighted as a key driver in restoring faith and increasing market penetration for the insurance sector.
Some of the challenges faced in the insurance sector include opaque practices, complex terms and conditions, delays in claim settlement and losses on policies from inflationary pressures.
“Consumers in Zimbabwe are demanding greater transparency in policy pricing, coverage and claims processes. This shift is pushing insurers to adapt their marketing strategies and adopt more consumer-centric, transparent approaches,” Head Hunters International managing consultant Andrew Jemedze said.
“The primary objective of the Consumer Protection Act (CPA) is to protect the consumer of goods and services by ensuring a fair, efficient, sustainable and transparent marketplace for consumers and business through the establishment of the Consumer Protection.
“Seventy-nine percent of consumers research a brand before making a purchase, highlighting the growing importance of brand reputation and transparency.”
He said transparency had become an inescapable reference in public, professional and private life as a form of governance for everyone.
Jemedze added that consumers expected firms to be forthright about their practices, values and products as the advent of social media caused 90% of consumers to read online reviews before visiting a business.
“Our stakeholders — customers, partners, suppliers, investors etc — know more than ever about organisations with which they do business. They possess unprecedented power to spread the word about anything that goes wrong or that displeases them,” Jemedze explained.
“When something goes wrong, the damage to your business and your reputation will be revealed more quickly and spreads faster and wider than ever before as we are operating in the perilous new landscape of data, transparency and social connectivity.”