HARARE – Assets for Zimbabwe’s short-term insurance industry have grown 137 percent to $396 million as at the end of last year compared to $167 million seven years ago as the sector experiences steady growth.
According to the Insurance and Pensions Commission (IPEC), gross premium written for the industry also jumped 100 percent to $235 million for the year to December 2017, from $117 million that was recorded in the same period in 2010.
Short term insurance provides cover against a physical or economic damage, usually the term for insurance policy is less than a year, for instance motor vehicle insurance policy term for four months.
As at December 2017, IPEC had 575 registered players under the short term insurance industry. Of these 369 are sole agents and 109 are corporate agents.
IPEC pensions manager Nhau Chivingira however indicated that despite the growth over the years, the sector is still marred by a host of challenges ranging from fraud, liquidity constraints and poor corporate governance which outweigh any further growth.
“Challenges facing the short term insurance industry include low levels of disposable incomes, failure to meet claims and non-compliance with minimum capital requirements,” he said.
Mr Chivingira added inadequate board oversight as well as inadequate or no policy procedures manuals have also affected the industry.
The short term insurance industry has, just like many industries in the country, been battling information technology (IT) deficiencies which result in compromised data integrity as companies continue to rely on manual records.
Government has made calls for the industry to embrace new technologies to cushion the sector from insurance fraud, which was bleeding both the industry and the public.
The sector has been hit by fraudsters with sale of fake insurance products by unregistered operators on the increase.