eBusiness Weekly
Enacy Mapakame
HARARE – Funeral assurance industry grew 15 percent in the last 12 months to June 2018. Between June 2017 and June 2018, gross premium written amounted to $93,58 million from $81,19 million in the prior year comparable.
Of this figure, life offices contributed $20,97 million which represented a growth of 6,45 percent from prior year’s $19,7 million.
According to figures from the regulator, Insurance and Pension Commission (IPEC) funeral assurers grew 18,1 percent to $72,61 million from $61,48 million achieved in the prior year.
Funeral assurance is a form of life insurance contract where the insurer promises to either provide an amount to settle funeral expenses, or provide funeral services, upon the death of the insured life.
In a presentation during a journalists mentorship programme jointly hosted by IPEC and ZimSelector, IPEC pensions manager Nhau Chivingire indicated that like any other sector in the country, funeral assurance industry was also reeling under the obtaining economic challenges.
Key among them are foreign currency shortages together with inflationary pressures. Latest figures from the Zimbabwe National Statistics Agency (ZimStat), inflation stood at 20 percent in October, the highest level since dollarisation.
“Foreign currency shortages as well as inflation (are) mainly affecting the funeral service provision business model,” he said.
The growth in the sector comes as the financial inclusion as a whole in the country is gradually growing. Authorities are targeting growth in financial inclusion by providing products that can cater for the once excluded part of the population especially the low income earners as well as those in the informal sector.
The insurance industry in general is targeting a 20 percent penetration.
“Funeral assurance gives financial security and allows for financial inclusion, it is relatively affordable and allows financial inclusion in that more people can buy these products,” said Fidelity Life Assurance’s Mrs Melanie Gumbo.
The insurance sector has been on a steady growth since dollarization. For short term insurance industry, assets have grown 137 percent to $396 million as of December 2017 from $167 million recorded seven years earlier.
