Ipec launches framework for low income earners

HARARE – The Insurance and Pensions Commission (Ipec) yesterday launched Zimbabwe’s maiden Micro-Insurance Regulatory Framework aimed at facilitating the provision of insurance to low income earners.

The regulator’s commissioner, Tendai Karonga, said the framework was useful in assisting Zimbabweans to access insurance services and fight poverty.

“Last year, the commission presented a draft Micro-Insurance Regulatory Framework…

“At the core of the framework is accessibility and affordability of insurance to low income consumers to reduce their vulnerability and to protect their income streams while at the same time improving social stability and broad-based economic development,” he said.

The framework had been informed by the central bank’s National Financial Inclusion Strategy, as a way of enhancing financial inclusion through insurance, targeting the previously excluded population such as small-to-medium enterprises, peasant farmers, vendors and other low income earners.

“A report by Swiss Re estimated that globally, Micro-Insurance has a potential market of between 3-4 billion policies generating between $30-50 billion in annual premium revenue.

“In the African continent, a recent report on the Landscape of Micro-Insurance in Africa Report indicates that $647 million was underwritten under Micro-Insurance, from 62 million people covered.

“As noted in the results of a Finscope survey done in 2014, 70 percent of adults in the country were not insured. Of the 30 percent with insurance, 77 percent of them were in respect of funeral insurance.

“This means there is a huge gap on the insurance uptake, which needs to be filled,” he said.

Ipec also appointed a steering committee for the framework, tasked with enhancing overseeing the framework’s implementation in the country.

“The committee will be chaired by Judith Rusike from the ministry of Finance, deputised Edward Gomba from the Zimbabwe Association of Funeral Assurers and Edith Hatendi from Life Offices Association.

“Other members are drawn from Ipec, the Reserve Bank of Zimbabwe, Securities and Exchange Commission of Zimbabwe, Insurance Council of Zimbabwe, Zimbabwe Association of Microfinance Institutions and last but not least, the academia,” the Ipec boss said. 

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