THE Insurance and Pensions Commission (Ipec) says the prevailing low disposable incomes are prompting a surge in the lapse rate of policies across the various product lines on offer.
Workers are enduring serious economic hardships, with their salaries falling far below the total consumption poverty line (TCPL) which currently stands at ZW$28 300 per month for a family of five.
The generality of the country’s workforce are earning salaries which are below ZW$20 000 and, apart from this, the challenge of an effectively dollarised economy with a huge gap between the official and parallel market exchange rates further complicates citizens’ purchasing power.
Speaking to The NewsHawks recently, Ipec commissioner Grace Muradzikwa said low disposable income has not spared the sector as testified by a surge in lapsing policies.
“Yes. There are policies which are lapsing, which we believe are as a result of low disposable incomes among other reasons. However, it is important to note that while some policies are lapsing, insurance companies are also writing new business.
“We expect this to continue improving as disposable incomes increase and as the industry develops appropriate products,” she said.
She expressed hope that locals still have confidence in insurance, as shown by the number of policies which the industry is writing and real growth being registered. Ipec would encourage the industry to develop appropriate products, which meet the needs of the consumers and treat their consumers fairly, she said.
Muradzikwa said in line with the mandate of consumer protection, the regulator has also issued various instruments that are meant to enhance the protection of consumers.
“We are also decentralising our services, particularly complaints handling to allow consumers to lodge complaints with us if they feel that they have been unfairly treated. So far, we have opened complaints handling offices in Harare central business district (CBD) and Bulawayo CBD.
“While we are in an inflationary environment, we are working with the industry to ensure that they invest in value-preserving assets to minimise losses. We believe with all these initiatives, consumers will continue to have confidence in insurance,” added Muradzikwa.— STAFF WRITER
