THE timeous settlement of claims has been identified as key in demystifying Zimbabwe’s insurance sector and restoring confidence in the industry.
The insurance industry, like the rest of the financial services sectors, has for years battled the loss of confidence owing mostly to the volatile exchange rate that has caused policyholders to lose untold amounts in their insurance claims.
Many people no longer see insurance products or services as valuable.
In the first quarter of the year, the regulator, the Insurance and Pensions Commission (Ipec) reported 27 complaints were received against short term insurers.
From this number, 7% complained about a delay in settlement, insufficient claim documents (26%), not satisfied with service and other (41%), repudiation (19%), and tobacco (7%).
Some companies are accused of not paying claims on time or using cumbersome processes.
Ipec is working to rectify and address the claim bottlenecks.
Discussions at the just ended Insurance Institute of Zimbabwe (IIZ) Winter School held in Nyanga, revealed that delays and cumbersome processes of claims process is still a bane for the industry.
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“The government has got a part to play when it comes to macroeconomics because insurance thrives on a stable macroeconomic environment.
“But as an industry, we also have a role to play. I think our major role that we can play is to ask what is the reason for existence?
“Why are we there as an industry? We are there to pay claims, to pay genuine claims on time,” P&C Reinsurance Company managing director Boas Manzvera said.
“If you can do that very well, I tell you, that will deepen the meaning that insurance matters because if we can do what we are set up for, and we do it perfectly well, that on its own is a selling point.
“If you tell someone whose claim was paid within 24 hours, that insurance matters, they will say, no, it does not.
“We probably wasted it when we then asked 21 questions when someone is claiming.”
He said a lot of questions were being asked when clients make claims despite that they are not part of the contract terms of the policy.
“So, I think the most important thing is to be clear in terms of what we are offering the client, and also not to lengthen the claims process,” Manzvera said.
“If we say we are paying claims within an hour, within 24 hours, let’s do that. Let’s not raise additional questions, you know, that would be misconstrued by a layman as a scapegoat for not wanting to pay claims.”
According to Manzvera, if the industry could do that effectively, without the scam sentiment and the macroeconomic instability, it would demystify the myth that insurers claim payouts are cumbersome.
IIZ general manager Davison Choeni said the delay in the settlement of claims was a cause for concern and the industry needs to understand that timeous settlements were a marketing tool.
“Because once you pay a claim, and you have a satisfied customer, they will speak good about you, so we need to move to the thrust,” Choeni said.
“We should understand that we are set in to pay claims. The essence of insurance is to pay claims.
“So, if we are not paying those claims, we are running away from our obligations.
“And that’s the thing that we need to create, to continuously talk to our players because it’s not only a marketing issue, but it’s also a moral obligation.”
In circular 3 of 2024, issued this year, Ipec said the commission had observed an increasing number of policyholders that sought its intervention due to the protracted settlement of claims in the insurance industry.
“In view of the foregoing, from the date of receipt of all the required submissions a decision shall be made and communicated to the policyholder within seven working days on the outcome of the claims application,” Ipec said.
“Further, once the claims authorisation process has been finalised, the claim shall be settled within three working days.”
Ipec said whilst additional investigations could be required in settling claims, insurers were advised to inform policyholders of potential delays and to provide clear explanations for the extended processing time.
