70pc Zimbabweans uninsured

HARARE - At least 70 percent of Zimbabwe’s adult population in not insured at all — be it medical aid or funeral cover — a survey has revealed.

According to FinScope Consumer Survey Zimbabwe 2014 (FinScope), 68 percent of the 70 percent say they cannot afford insurance cover at all.

“… most of those claim that insurance is not affordable and too expensive,” said FinScope.

“Of those who do not have insurance, 30 percent believe they do not need it while 10 percent do not know how insurance works,” it said.

The FinScope study also indicated that of the insured 30 percent, most had funeral cover and medical aid.

Further to this, Finscope said informal insurance such as burial societies seemed to be popular among those who claimed to be insured.

Zimbabwe has a population of slightly over 13 million, according to findings of the last national census conducted in 2012.

The FinScope study was based on a nationally representative sample of adults who are 18 years or older, with a total of 4 000 face-to-face interviews conducted by Research Continental-Fonkom while Africa Corporate Advisors were the local project coordinator.

However, consumers now view insurance as a luxury due to worsening economic conditions being experienced in Zimbabwe, thus the future of the sector is gloomy, according to industry players.

Experts attribute liquidity problems being experienced by the country as the main cause for the low insurance uptake in the country.

The country’s slowing GDP growth; rising inflation, unemployment and the financial pressure on consumers all weigh on the insurance operating environment in the country.

Currently, the amendment of the Insurance Bill is in progress, and the new one set in new capital in July last year.

It places emphasis on corporate governance, monitoring and compliance in the sector.

The insurance sector was depressed in the first half of 2014, with the industry’s contribution to the stock exchange’s turnover down 5,97 percent, according to stock broking firm IH Group (IHG)’s insurance index.

The IHG report said the sector’s year-on-year to June contribution to the bourse’s turnover was also down 8,18 percent.

The sector’s contribution to total market capitalisation was three percent in June 2014 down from four percent in June 2013.

IHG’s corporate analyst Vikesh Goran said the insurance sector’s poor performance and contribution on the ZSE is largely attributed to the liquidity crunch.

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