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Grace Muradzikwa, IPEC Commissioner


Ipec commends life assurance firms amid Covid-19 turmoil



THE Insurance and Pensions Commission (Ipec) has commended funeral and life assurance companies for managing to meet policyholders’ claims despite constrained resources caused by Covid-19-related deaths.


Zimbabwe, which is in the grip of the third wave of infections driven by the spread of the Delta and Beta variants of the virus, suffered significantly during the second wave of the pandemic which wreaked havoc, increasing Covid-19 fatalities.

As of 19 July, Zimbabwe has recorded 85 732 Covid-19 cases, 55 714 recoveries and 2 697 deaths, according to official figures.

The pandemic has brought about many challenges that resulted in businesses being challenged to revamp their operations and adapt to the new normal.

In its latest consumer education newsletter, Ipec applauded assurers for managing to meet policyholders’ claims under difficult circumstances.

“While the Covid-19-related deaths stretched the resources of funeral and life assurance companies, it is gratifying to note that the sector weathered the storm as assurers managed to meet policyholders’ claims,” Ipec commissioner Grace Muradzikwa said.

During the first quarter of 2021, the funeral assurance sector’s inflation-adjusted gross written premium (GWP) increased by 158.28% to ZW$56.90 million.

In nominal terms, new business accounted for the major increase in GWP increasing by 349% to ZW$4.3m.

The increase in GWP was also on account of premium increases as funeral assurers sought to align both the premiums and policyholder benefits to the dynamic macro-economic environment in response to inflation trends.

All the players recorded significant growth of above 100% in GWP and none of the players recorded negative growth.

The sector, according to Ipec, continues to face intense pressure and competition from life assurers writing funeral business.

For the quarter under review, life assurers wrote inflation-adjusted funeral assurance business worth ZW$852.56m which was 14 times more than the ZW$56.9m written by the dedicated funeral players.

Driven by the need to ensure that the industry continues to settle claims and pay benefits even during the Covid-19-induced lockdown, Muradzikwa said they issued “circular one” of 2021 in January calling on industry players to activate business continuity plans in response to the lockdown measures.

“The regulator also facilitated that the insurance and pensions industry be accorded the essential service status by the government. To entrench consumer protection in the insurance and pensions industry, the commission continued to issue instruments to insurance companies and pension funds,” she said.

In particular, the commission issued a “treating customers fairly” framework, which provides key principles and outcomes to be observed by all insurance companies and pension funds to ensure fair treatment of customers.

“The commission noted an increase in the number of suspended pensioners since the onset of the Covid-19 pandemic because of their failure to submit certificates of existence to prove that they are still alive,” she said.

One reason could be that pensioners were unable to travel due to the Covid-19-related regulations, Muradzikwa said.
She said they were also implementing various projects that are meant to enhance consumer protection.

One of the key projects included the asset separation exercise, which is aimed at ensuring that assets belonging to policyholders are not unfairly transferred to shareholders.

“Together with key stakeholders in the insurance and pensions industry, the commission is spearheading the development of relevant and appropriate mortality tables for Zimbabwe. The tables will help in accurate and fair pricing of life and pension products. You can read more on this, in the article in this edition,” she said.

She said the commission was also seized with implementation of the revaluation guideline for the Insurance and Pensions Industry on adjusting insurance and pension values in response to the 2019 currency reforms.

“Whilst regulated entities are at various stages of compliance, I am happy to advise that in compliance with the requirements of the Revaluation Guidance, some pension funds have declared bonuses that are as high as 800%,” Muradzikwa said.

She said Ipec is working closely with key stakeholders on securing compensation for policyholders and pension scheme members whose policies lost value following the 2009 adoption of the multi-currency regime.

“A compensation roadmap is being developed and is expected to be implemented this year. The commission fully understands the anxiety from stakeholders, particularly pensioners who have been patient for too long,” she said.

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