Insurance sector recoversslowly

Beneficiaries are starting to realise the necessity of securing insurance policies. The renewal of pension contributions by companies and individuals is a reflection of a positive outlook of the industry, Magorimbo said.

He said that companies in the tourism and mining sectors were starting to contribute towards their employees pension funds, while challenges in manufacturing and banking were still preventing employers from contributing to pension schemes.

He hinted that Zimnat was likely to win more clients as the economic situation improved.

Zimbabweans are quite aware of the returns of insurance policies, so they will soon opt for them once they have disposable income. The majority of our clients are civil servants who regard insurance as a luxury. Financial stability will support the long-term prospects of the insurance system, he said.

Magorimbo said the industry appreciated the reluctance of clients to pay into policies that had lost value.

We have to educate the public on the benefits of policies. The continual removal of zeros and currency reforms resulted in policy holders losing confidence when their benefits were reduced to nothing, he said.

The industry was facing challenges of liquidation of assets so that they could pay out benefits. Most buildings in the city were bought using either pension or insurance money. Lack of buyers has made it difficult to evaluate assets.

Care Insurance Brokers Managing Director Innocent Nousenga said the industry was picking up slowly.

We are getting clients at a slow pace. The new clients we are getting are small to medium enterprises that have disposable income. A lot of people are doing without insurance.

Nousenga said people were compelled to take short-term insurance for cars because they had no choice.

Motor vehicle clients are taking compulsory cover at low premiums, he said. Clients consider long-term policies as a luxury. The cash crunch has resulted in most clients being inadequately insured.