Insurance players should come up with lower cost products, which tally with the prevailing economic challenges, Insurance Institute of Zimbabwe (IIZ) president has said.
BY FIDELITY MHLANGA
Speaking at the institute’s winter school which started in Nyanga on Monday, IIZ leader Edward Gomba said the harsh economic environment obtaining in the country was making it difficult for insurance consumers to buy expensive packages.
“There is no escaping the fact that our clients in this day are more concerned with making ends meet, and as such, a low-cost simple product that delivers only essential items may be the order of the day. In tough times like these, the first thing to go among other so-called ‘non-essentials’, is insurance,” he said.
Gomba urged insurance companies to be innovative and creative so as to propel the business forward.
The winter school is being held under the theme “Going back to basics with a dynamic new mind set”. The school ends today.
Gomba said, for example, in motor insurance, a client pays full cover for their car in one term and in another, they fail to raise the required amount and goes for third party insurance as such a client would have removed insurance as part of priorities.
To mitigate such challenges and draw backs, Gomba said insurance businesses should put in place proper strategies and go back to basics as the current economic environment required flexibility, and one of the most important skills was the art of compromise and avoiding rigidity.
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“From the consumer’s point of view, the insurance renewal is presented by the industry as binary — you either pay or you do not pay. To mitigate such challenges and draw backs that have become the order of the day in the insurance business world, proper strategies have to be put in place and going back to basics should be inevitable for every firm,” Gomba said.
The current environment, according to Gomba, demanded continuous review of strategies and techniques for survival and growth into the future with the winter school being one of such platforms to sharpen the future insurance industry leadership.
In the first quarter of 2016, non-life insurance firms registered a 38,95% decline in profit after tax, writing a lower volume of business due to economic slowdown.
According to the Insurance and Pensions Commission’s report for the quarter to March 31 2016, the non-life insurance sector’s total profit after tax was pegged at $2,39 million, down from $3,92m during the same period of 2015.
