Traditional methods of doing business in the insurance industry came under the spotlight at the Insurance Institute of Zimbabwe (IIZ) annual conference which ended in Victoria Falls on Tuesday.
For many of the insurance practitioners who attended the conference, the message could not have been clearer – innovate or die – a stark reminder to local insurers that it can no longer be business as usual in a rapidly changing operating environment.
Shortcomings in the sector in Zimbabwe were listed as including lack of or low priority given innovation, worsening liquidity constraints, failure to adopt appropriate technologies and failure to develop relevant skills to propel the industry into the future.
“There are so many challenges that we must overcome in order to move forward,” IIZ president Chomi Makina told delegates in his opening statement.
“The outlook looks promising, however, in the short to medium term, we will have to deal with challenges that are beyond our influence such as liquidity constraints, manufacturing industry operating below capacity, high unemployment levels, low employee remuneration levels, high interest rates, and lack of direct foreign investment.”
Makina noted that the insurance landscape was becoming increasingly competitive with the advent of new technology changing ways of doing business in almost every sphere.
“Organisations need to invest in keeping up to speed. Those that are embracing these new ideas are the ones that will survive into the future. Because of the fast pace of technology, our industry must innovate in order to remain relevant in this changing world,” he said.
Makina also stressed the need for the industry to prepare for deregulation which most countries around the world were pushing for. “Deregulation will usher borderless business. We need to be ready to expand into new markets, new countries and to also welcome new players into our market,” he said.
According to First Mutual Holdings board chairman Oliver Mutasa, in terms of what he termed categories of insurance motivation, most Zimbabwean insurance companies were mere survivors in an industry where the ultimate goal was to rise from copying the business models developed elsewhere to being pacesetters and leaders in research, development and innovation.
Innovation, Mutasa said, needed to go beyond the mere improvement of efficiency in the way companies operated to generate new concepts that added value to insurance products for the benefit of and increasingly discerning insuring public.
While acknowledging that many Zimbabwean companies had been reduced to the “ survivor status partly by the difficult operating environment and limited resources, Mutasa said the first step in overcoming these difficulties was to improve skills — to engage visionary thinkers, and upgrade technical knowhow to enable the industry to unlock existing potential and look beyond what is possible today.”
He noted that many global giants that were market leaders such as Nokia, Kodak & IBM were on the backburner resulting from not embracing technology and innovation.
Mutasa bemoaned the low priority given to innovation in most companies in Zimbabwe where, while it was officially recognised as a vital aspect of corporate governance, there were never any real efforts to nurture and encourage it to exploit opportunities at management level.
He stressed the need for board members of insurance companies to become proactive and become drivers of innovation in their companies.
Meanwhile, Chomi Makina was retained as president of IIZ for another term while LovemoreGombera, chief executive officer of Alexander Forbes was elected 1st vice president while Hammish Maclean was elected 2nd vice-president.