THE Insurance and Pensions Commission (IPEC) is working with the Zimbabwe Association of Funeral Assurers (Zafa) to restructure funeral policy products and pricing, it has been revealed.
This comes as life assurer, Nyaradzo Life has been criticised on social media for allegedly cancelling customers’ policies if three months’ worth of subscriptions were missed, despite the client having paid for decades.
As of June, there were eight registered and operating funeral assurers, 12 registered life assurers and four reassurers registered under Ipec supervision.
“The Insurance and Pensions Commission (Ipec) has taken note of ongoing discussions on social media regarding funeral assurance products and pricing in Zimbabwe,” Ipec said.
“Ipec acknowledges the concerns that have been raised by the public on the matter and wish to advise that prior to the current discussions on the matter, Ipec, in line with its mandate of protecting the interests of policyholders, was already in engagement with funeral assurers through their association Zafa on these and other issues.”
The insurance regulator revealed that these engagements, which also centre around product design and pricing, are expected to culminate in reforms that will ensure the vibrancy and sustainability of the sector and the protection of policyholder interests.
In the life assurance half year 2022 sector report ended June, Ipec had previously urged all life assurers to re-package their products and align them to policyholders’ expectations in terms of value preservation and relevance.
“This is very important given the low policyholder confidence due to legacy issues emanating from the 2009 and 2019 currency reforms induced loss of value,” Ipec said in the report.
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It said that funeral assurance policies continue to dominate life assurance product lines because of their defined benefit nature, especially during the current inflationary environment.
“Traditional life assurance products, which include term assurance, endowment policies, pure endowment and whole life accounted for a small proportion of business generated by life assurers. This reflects low appetite for traditional life assurance products by the market as confidence remains low after two successive episodes of loss of value.”
For the half year ended June 30, 2022, gross premium written (GPW) grew by 26% to $9,3 billion for the life assurance sector from a 2021 comparative of $7,4 billion, Ipec reported.
The sector’s foreign currency business during the period amounted to US$9 million with Nyaradzo taking up 48% of the GPW.
Ipec also reported that the funeral assurance sector’s GPW increased by 17,2% from $474,61 million reported for the six months ended June 30, 2021 to $556,24 million for the six months ended June 30, 2022. In terms of foreign currency business, the sector wrote gross premiums of US$132 359 and ZAR119 082 in the period under review.
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