Moonlight, Doves top funeral assurances list

HARARE - Funeral assurance firm Sunset recorded a 23 percent decline in written premiums to $47 000 in the six months to June 2014 compared to $67 000 in the prior period, while Moonlight, Doves and First Funeral snapped up 80 percent of the $19 million written in the sector.

A recent report by the Insurance and Pension Commission (Ipec) showed that following the upgrading of Nyaradzo Funeral Services into the life insurance sector, Moonlight became the country’s largest funeral assurance company in the period under review having written premiums worth $6,9 million followed by Doves, $4,2 and First Funeral $3,9 million respectively.

According to Ipec, the funeral industry wrote $19 million in net premiums compared to $16 million recorded in June 2013, while total costs grew by 10 percent to close the first half of the year at $14 million from $13 million reported in the same period last year.

Players reported $5 million in operating profit up from $4 million registered in the prior period.

The expense and combined ratios were reportedly 49 percent and 73 percent respectively.

“As at the current reporting period, total assets were $45 million from $36 million reported as at June 30, 2013. The industry must comply with prescribed assets requirements as the compliance rate is very low as reflected by only three players being compliant,” said Ipec.

The insurance regulator noted that funeral players are encouraged to continue building on this growth momentum by way of product innovation and embracing new concepts particularly micro-insurance whose framework is under preparation.

“Should growth continue, penetration levels which are currently at three percent would increase,” said Ipec.

The latest industry report comes after Doves recently launched a new product, Smartdove, which is expected to contribute over $100 000 to the company income by December 2014.

Prospective clients will register using their cellphones. The same platform allows members to add their dependents at additional premiums and the payments will also be done using the same platform using vouchers that will be distributed in OK Supermarkets and at Doves branches.

All mobile money transfer services such as EcoCash, One Wallet and Telecash are also linked to the Doves payment system.

The product costs $2,50 a starter pack. Monthly premiums will be $1 for each immediate family member and $2 for each dependent and $2,50 for each line holder.

Doves general manager sales and marketing Albert Mawungwe said the funeral assurer was expecting to register 10 000 policies generating $25 000 per month.

“We expect to register an average of 10 000 people by end of September and each month we are looking at generating $25 000.

“Smartdove is expected to generate plus or minus $100 000 by December 2014,” Mawungwe said.

“A basic funeral will be provided on three-tier caskets for the immediate family and three-tier coffins for dependents.

“Hearse for the deceased will be provided within a radius of 30km from Doves parlour and a beneficiary who uses an alternative funeral provider will be given cash in lieu. Other dependents have a waiting period of up to six months,” he said.

He, however, said many people in Zimbabwe have the belief that funeral policies were a preserve for the middle to the upper class, yet the industry has products that are designed to suit all market segments.

“The penetration rate has been very low for the informal sector segment and the unbanked market, because of the premium remittance challenges leading to high lapse rates.

“The above mentioned markets have on numerous occasions tried to prepare for funerals by setting up family funds, burial societies, among many other initiatives. These initiatives have failed to provide long term solutions since the funds are frequently abused,” he said.

Mawungwe noted that the Smartdove product will address these challenges as well as increase funeral policy accessibility to mass market since the product would be sold in supermarkets and by airtime vendors.

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