Funeral assurers should embrace technology: Ipec

HARARE - The Insurance and Pensions Commission (Ipec) has urged funeral assurers to take advantage of new technologies to increase business.

In a statement accompanying its funeral assurers report for the half year ended June 2018, the regulator said funeral assurers should take advantage of mobile platforms and other information and communication technology (ICT).   

“Funeral assurers should take advantage of the proliferation of new ICT platforms such as mobile transfer systems to develop new distribution channels as a way to increase business.

“More so with the increase in competition from life assurers selling the same product, players are encouraged to be competitive in pricing and product structuring,” read part of the report.

The report shows that funeral assurance industry’s total gross written premium amounted to $20,97 million for the half year ended 30 June 2018, representing a 6,45 percent growth from $19,41 million reported for the same period in 2017.

“The growth in gross written premium reported by the funeral assurance industry was driven by positive growth in gross written premium of four players ranging from 2,1 percent to 28,57 percent. The remaining five players reported negative growth ranging from 2,03 percent,” the commission said.

Net profit after tax for the industry increased by 2,47 percent from $2,79 million reported for the half year ended June 30, 2017 to $2,86 million reported for the half year ended June 30, 2018.

The regulator said management expenses coupled with commission accounted for a total of 54,43 percent of total gross written premium.

“This is worrisome to the commission as it indicates that a large chunk of premiums are being channelled towards management expenses and commissions as opposed to settlement of claims and reserving for future claims.

“The commission strongly urges players to find lasting solutions on cost rationalisation through the use of modern technology such as digitalisation to eliminate some business processes and take advantage of information and communication enabled cheaper distribution channels,” Ipec said.

The commission said business mix for the funeral assurance industry was heavily skewed, by source towards individual business which accounted for 54 percent of total gross written premium, while the remaining 46 percent of the gross written premium came from corporate business.

 

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