Insurance sector urged to join economic transformation agenda

THE pensions and insurance sector should embrace innovation and position itself for wider business opportunities being created under the Government’s National Development Strategy 1 (NDS1), a transformative blue-print that builds momentum towards attainment of an upper middle-income economy vision by 2030.

Finance and Economic Development Minister, Professor Mthuli Ncube, said this here on Monday while officiating at the Insurance Institute of Zimbabwe (IIZ) where he challenged players in the sector to devise resilient business strategies that impact positively on the country’s economy.

As Government forges ahead with implementing NDS1 (2021-2025), the focus is to ensure attainment of Vision 2030 while at the same time addressing global aspirations of the Sustainable Development Goals (SDGs) and Africa Agenda 2063, he said.

National Development Strategy 1 (NDS1)

In a speech read on his behalf by a senior ministry official, Mr Matthew Sangu, Prof Ncube said the overarching goal of NDS1 is to ensure high, accelerated, inclusive and sustainable economic growth as well as socio-economic transformation in line with President Mnangagwa’s policy ‘leaving no one and no place behind’.

He implored the insurance and pensions sector to play its part by working closely with the Government to unlock more economic opportunities that will transform ordinary people’s livelihoods.

“We cannot walk this talk without the support of the long-term investments in the insurance and pension sector,” said the minister.

“Increased public-private projects in infrastructure development and housing delivery, have a sustainable income-generation and high investment returns should be pursued to be accorded prescribed asset status.”

President Mnangagwa

He pledged continued Government support in providing the conducive environment for the insurance sector to thrive and challenged the industry players to also play their part and come up with products that entice the market.

“I reiterate, Innovation, Innovation, Innovation is key to creation of the market. Let’s remain resilient, seize opportunities, be creative, drive innovation, and ensure sustainability,” said Prof Ncube.

“Investing in prescribed asset projects is a regulatory requirement that should be taken seriously to comply with the set threshold.”

The drive to rejuvenate the insurance sector comes at a time when the Government has kickstarted the process to ensure compensation for losses made in 2019 during the conversion process from United States dollars to the Zimbabwean dollar as approved by Cabinet.

“To cement the compensation process, Government is seized with the finalisation of the pre-2009 compensation regulations,” said Prof Ncube.

He indicated that funding towards compensation for loss of values is being considered in the 2023 national budget, whose implementation is expected to enhance confidence in the sector and promote more client participation in line with the Zimbabwe Financial Inclusion Strategy.

This comes amid concerns that the uptake of insurance products remains low at 22 percent this year, down from 26 percent in 2014 in adult population driven mainly by funeral insurance, which accounted for 72 percent of those insured. Formal insurance remained low at 24 percent up from five percent in 2012.

“The future growth and sustenance of the insurance industry lies in your capable hands. Your strategic focus should be to agree collectively and move decisively as an industry and as individual business towards quality yield-driven insurance and consequently devise and execute the strategies that will take us to another level,” said Prof Ncube.

covid-19

“I would like to urge you to reposition yourselves for more sustainable growth as you implement new ideas and concepts from what you have learned in these uncertain times we are operating under.”

The minister also urged players in the industry to capacitate workers and assist them acquire new skills to enhance productivity, business growth and higher-value innovation that supports industry and fills the gap left by skills flight.

He said the insurance sector has not typically been considered an upholder of innovation, despite being known for creating new and exciting markets around emerging risks.

Prof Ncube said the Covid-19 pandemic era was a rude awakening for the sector as it exposed weaknesses in some organizations’ strategic resiliencies to disruption, and commended market players that passed the pandemic challenges and remained resolute.

This year’s conference runs under the theme: “Resilience! Opportunity! Growth – Driving Insurance Forward” and ends today.–chronicle.cl.zw