Source: ‘Life assurers must break away from outdated models’ -Newsday Zimbabwe
THE Life Officers Association of Zimbabwe says the country’s life assurance sector must break away from outdated models and embrace innovation to regain public trust and become relevant to consumers.
The call by Life Officers Association of Zimbabwe secretary-general Rufai Mavukeni comes as the sector is battling a low uptake of life policies, worsened by economic instability and legacy issues from the 2008/09 hyperinflation era that wiped out policies’ values.
Speaking to NewsDay Business, Mavukeni said the sector could not transform without first reconnecting with the public and reshaping how life products were packaged and delivered.
“To turn this around, we need to focus on educating the public about life insurance needs. Simplifying products, offering flexible payment options and enhancing customer engagement through personalised advice can help build trust and encourage uptake,” Mavukeni said.
“Emphasising the long-term benefits of life insurance in securing financial futures is essential.”
The call also comes as most Zimbabweans are operating in the informal sector and struggling to eke out a living amid macroeconomic challenges.
Mavukeni said the informal economy presented a significant opportunity if approached strategically.
The informal sector generates over US$1 billion per month.
“The use of technology to tap into the informal market is an important consideration, while the formalisation of the informal market will create a market for the traditional life insurance products,” Mavukeni said.
A key concern, however, is currency instability, which undermines the long-term value of life assurance products like pensions and funeral policies.
“A stable currency is critical for long-term products like life insurance, pensions and funeral products,” Mavukeni said.
“An improvement in the management of our currency will go a long way in encouraging growth for the industry.”
He said the decline in life insurance uptake could be attributed to several industry-specific factors, including a lack of awareness and understanding of products, complex policy structures and a perception of life insurance as an unnecessary expense.
“Additionally, economic challenges have led to short-term financial thinking among consumers,” Mavukeni said.
“Legacy issues where value was lost, especially in 2009, have destroyed trust between insurance companies and the customers.”
He pointed to product innovation and digital integration as areas the industry should double down on.
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