The Sunday News
Michael Magoronga, Midlands Correspondent
THE insurance and pensions industry, which is a key component of the financial sector plays an important role in ensuring sustainable growth through mobilising savings, directing funds into productive sectors, management of risks, efficient allocation of resources and facilitating delivery of products and services, a Cabinet Minister has said.
Speaking during the Insurance and Pensions Media Awards held in Harare recently, Finance and Economic Development Minister, Professor Mthuli Ncube said the importance of the insurance and pensions industry to national development cannot be overemphasized as it falls under the Macro-Economic Stability and Financial Re-Engagement National Priority Area of the National Development Strategy (NDS1).
“Government notes the pensions and insurance sectors’ investments in prescribed assets in 2022, which amounted to ZW$74 billion and ZW$41 billion, constituting 7% and 9% of the industry assets, respectively. These levels are below the prescribed levels for the insurance and pensions industry, which is regrettable. I call upon the sector to comply with this statutory requirement” he said.
Prof Ncube said there was no justification for continued non-compliance considering that the Government now confers prescribed asset status even on private equity if it is of national importance.
“Notwithstanding the low levels of compliance with prescribed assets, the Government acknowledges the role that the insurance and pensions industry plays in the economy.”
Last year the government launched the National Financial Inclusion Strategy II (2022-2026).
“As stated in NDS 1, financial inclusion is key in promoting inclusive growth by providing access to financial services, loans, credit and insurance by previously marginalised segments. This allows the previously marginalised to engage in gainful economic activity,” he said.
Pursuant to this objective, IPEC had licensed 10 microinsurance companies as at 31 December 2022.
“This is a critical development towards facilitating access to and usage of insurance products by previously excluded segments of society. IPEC is also spearheading various projects, among them the Innovation Lab, Agricultural Index Insurance and the Bima Lab whose objective is to come up with insurance solutions for smallholder farmers to mitigate the effects of climate change. This is well-aligned with the Food and Nutrition Security Cluster of NDS1,” he said.
He said the Government is also aware that IPEC is currently developing a Micropensions Framework, which will facilitate access to and usage of formal retirement savings by those with low and irregular income, particularly the informal sector.
“This will enhance social insurance and social security coverage as envisaged by NDS1. I call upon the pensions sector to be innovative and come up with appropriate products that meet the needs of the targeted beneficiaries,” he said.
Prof Ncube said the insurance and pensions industry is grappling with low confidence due to the low values that policyholders and pensioners got after adoption of the multicurrency system in 2009.
“However, I am glad that finalisation of the compensation exercise as recommended by the Commission of Inquiry into the Conversion of Insurance and Pensions Values from the Zimbabwe dollar to the United States Dollar, is almost done.
“It is Government’s expectation that IPEC and the industry will expedite the compensation exercise, as soon as the regulations are gazetted. Ladies and gentlemen, compensation
for the 2009 losses will go a long way in restoring confidence in insurance and pensions,” he said.
He said the media should continue to hold the industry to account to ensure that insurance companies and pension funds perform as per the provisions of the law and the set standards.
“The media should also educate the public that insurance and saving for retirement remain relevant notwithstanding the challenges relating to the operating environment. However, the media should avoid sensationalisation but adhere to accurate and objective reporting.
The insurance and pensions industry should also avail themselves to answer to any questions that the media may raise. The industry should see the media as a strategic partner rather than an adversary,” he said.
IPEC Commissioner, Dr Grace Muradzikwa said the launch of the Awards in 2018, complimented by the Journalists Mentorship Programme that the Commission is spearheading have not only resulted in increased coverage of insurance and pension matters in the media but improvement in the quality of articles and diversity of the topics as well.
She said IPEC will continue to inspire the media to cover insurance-related matters and to capacitate journalists so that the quality of the coverage is beyond reproach adding the outbreak of the Covid-19 came as a blessing as the mentorship programme which is now being held virtually, was spread across the country.
The pandemic came as a blessing in disguise because in the past we would have physical Journalists Mentorship Programme sessions for Harare journalists only with an average enrolment of 15 participants.
However, with the advent of the pandemic, which culminated in increased usage of virtual meetings, we migrated our sessions to virtual platforms. As a result, we were able to take journalists from across the country with an average enrolment of 45 participants per year.
Journalists drawn from across the country walked away with cash prizes, certificates and shields after winning in nine different categories.
