Leonard Ncube, Victoria Falls Reporter
THE Insurance Institute of Zimbabwe (IIZ) is working on a national risk assessment exercise to find strategies of addressing challenges facing the industry and restoring waning client confidence.
Recent years have seen the insurance industry take a nosedive in terms of market confidence owing to loss of people’s savings in financial institutions and pensions. The institute members met in Victoria Falls this week for an annual conference where topical issues affecting the sector were discussed. Insurance commissioner, Dr Grace Muradzikwa, said efforts were being made to correct anomalies in the sector.
“There are concerns around the economy and industry such as money laundering, salaries, capital levels, governance issues and market conduct, which relates to treating customers fairly and products that satisfy clients.
“We are moving on to do a sectorial risk assessment where we will do site inspections to focus on area of money laundering. There is the issue of lack of confidence where people talk about pensions benefits. We think if we address the issue of pensions, we will have addressed about 60 percent of confidence issues,” said Dr Muradzikwa.
She said there was a need to explain to people the relationship between contributions and benefits.
“The market has been resilient and now it’s time to assess if the products offered are relevant and if the industry has been treating customers fairly. Naturally the focus for us now is around pension benefits and this is an area we are engaging the industry to see if we can correct this.
“We have concerns around product relevance such as college funds and the difference between short term and long-term benefits,” said Dr Muradzikwa.
She said the insurance industry was key to the country’s future as it has a role to play in the Transitional Stabilisation Programme (TSP).
“Insurance industry is key to the country’s future because it is the biggest contributor to resource mobilisation as the bulk of listed investments belong to the insurance industry. One has to appreciate the role of the sector in economic development,” she said.
Dr Muradzikwa said Zimbabwe had been put under risk watch hence there is a need for the industry to play its part to make sure that Zimbabwe is not downgraded.
“This is a serious issue for the country and industry,” she said.
The conference, which ended yesterday, was held under the theme: “Challenge risk culture. Rethink business models. Navigate uncertainty”. It deliberated on strategies towards addressing risk challenges in the industry.