CROSS-BORDER trading in Zimbabwe has grown significantly since an estimated US$1,15 million
was reported in transactions in 2016, sparking discussions around insurance for traders. At the recent Southern Africa Insurance Indaba, cross-border trading insurance was highlighted as a key tool for unlocking trade, investment, and economic resilience across Africa. Our chief reporter, Melody Chikono (MC), spoke with Old Mutual Life Assurance general manager, Linda Mariwande (LM), who discussedregulatory challenges and the need for tailored insurance products.
MC: Your panel discussion was centred on cross-border insurance. What is this about?
LM: Cross-border insurance is a catalyst for economic integration. When you have integration and good trade happening, there is obviously mobility. When you talk about cross-border trade, it means that goods and people can move across borders. There lies the opportunity in terms of business and trading between countries. But then, there also arise some risks, and that is what insurers handle.We are saying that when the AfricanContinental Free Trade Area (AfCFTA) came up with the idea of trade across Africa among participating countries, what does that then mean for insurance? We are at the back of that development, and we provide insurance for the risks that we manage. For instance, when goodsare moving inter-country, there could bean accident, cargo theft, or cargo damage.All sorts of risks can arise, so insurerscome in and cover those risks to avoid total loss.
MC: How have you been addressing these risks?
LM: So far, if a trader is coming fromZimbabwe, we can cover them. But whenthey cross borders, they ma have to think of another plan for some risks which is very difficult because each territory has its own regulations and products. So, where we cannot cover from point to point, they must look for another level of cover, which is a bit challenging. If there was a situation where we could cover the whole spectrum, it would make things a lot less complicated for our traders.
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The other issue is that the nature of cover we are providing is largely tailored for bigger players, yet smaller players are also quite active in Africa, as the continent is largely made up of micro-businesses.
MC: What can you say are some of the challenges in terms of integration, in terms of cover across borders?
LM: The largest problem right now is the fact that we do not have seamless regulation: thus, we cannot have seamless cover. People must understand what is expected in Zimbabwe. We do have some regional components, so there are rules that apply in the Southern African Development Community (SADC), but when you go to the Economic Community of West African States (Ecowas), it is different. When someone is trying to move goods from Kenya to Zimbabwe, or Zimbabwe to Uganda, or to Nigeria, the rules automatically change. So, the need for standardised regulation becomes key.
MC: Besides regulation, what are some of the other challenges?
LM: Infrastructure. We also do not have proper infrastructure or continuity across borders. We do provide sophisticated structures in terms of financing, but we also need hard infrastructure such as roads, rail, and related facilities. When that happens, it helps the movement of goods between countries.
MC: In the face of these challenges, what can you say have been the implications?
LM: Probably we can talk about our own side. We are talking about integration across Africa, but we actually do not have integration within countries themselves. I think one of the biggest considerations for the industry is to start identifying the economies of scale we can enjoy by collaborating and working together. We must also find spaces where we do not necessarily compete, where competition is not required. One of the biggest cost drivers I have seen is systems. If we could have common systems or common platforms, which are very expensive particularly for smaller players, it would make a difference. For someone trying to come in, it is very important and crucial for us to identify where we can have common platforms, as well as items and skills that can be shared. If we do not even share resources, it could be okay, but let us compete where competition is necessary and share what can be shared.
MC: Any indications in terms of po- tential revenues that could be lost by not integrating?
LM: Off the top of my head, I do not have an exact figure on potential revenue loss, but what I can say is that when you are in a country where insurance penetration is at 1% of GDP (gross domestic product), it means there is a lot left untapped. It means we are collecting only 1% of GDP in a country that needs infrastructure, yet we have the capacity to generate and mobilise savings and investments that can actually support the country. I think the growth of insurance, even as a sector, never mind going across borders, is very important. We must look for opportunities to insure as many people as possible, encourage saving, and enable participation so that we can generate enough revenue and resources to develop our infrastructure in general.
MC: As Old Mutual, what are you doing in terms of working towards this?
LM: We participate in a big way. We are an integrated financial services business. Our businesses include banking, life insurance, general insurance, and stock broking, among others. Through our life business, we provide life cover and collect premiums, which we then invest in various projects. Some examples of our participation in the economy include investments in power generation projects, such as the Centragrid Solar Plant in Nyabira and the Great Zimbabwe Hydro Power Station in Masvingo.
We invest wherever we see a need that we can fulfil. We have also undertaken several housing developments throughout the country, including Westgate and, more recently, Prospect. We do what we can to spur the economy.
MC: There was a discussion on de-risking Africa. What is your take on that?
LM: De-risking Africa is a very broad term, but I would say we should not look at Africa’s challenges as trouble, but as opportunity. Whenever there is a problem, something needs to be solved, and that presents an opportunity.
When people look at Africa, they think about wars, hunger, floods, and other difficult situations, but we know our space and need to have confidence in it.
That confidence encourages others and makes it easier to attract investors.
Typically, investors may ask why we are not doing it ourselves. So we need to show leadership and confidence in our country by taking action. In terms of structures, governance, proper processes, and appropriate covers, we need infrastructure and systems that give investors’ confidence to come into Africa. We also have the power to negotiate with investors because we have resources to trade. If we are on the back foot, we cannot bargain effectively. We need to negotiate as equals, and that can only happen if we build the necessary muscle by putting strong systems and processes in place.
Marowande is the General Manager at Old Mutual Life Assurance Company Zimbabwe Limited, with a career spanning several leadership roles across the Old Mutual Group in Zimbabwe and West Africa. She holds a BA from the University of Zimbabwe, an Advanced Diploma from the Chartered Insurance Institute (UK), and a Master’s in Business Leadership amongst other qualifications and leadership development programmes.
Passionate about leadership development, wealth management, and women’s empowerment, Lindah is an active mentor to young professionals and emerging leaders in the financial services industry. She is also a respected voice in the insurance and retirement sector, frequently sharing insights on insurance and the future of pension management at local and regional forums. Mariwande continues to champion growth, purpose-driven leadership, and financial empowerment for others.