By Noah Kupeta
Zimbabwe, (News of The South) – The introduction of national lock downs across the globe has arguably threatened the performance of African Insurance and Pension industry as a result of COVID 19 pandemic- further calling for an upward review of premiums in the interest of policy holders.
Economic analysts have indicated that Sub-Saharan African economies are projected to shrink by 1.6%, which is four percentage points lower than the 3.6% growth initially projected in the October 2019 International Monetary Fund World Economic Outlook. The World Bank estimates that 2020 will mark Sub-Saharan Africa`s first recession in 25 years
Already, the International Monetary Fund (IMF) has indicated that Zimbabwe’s economy is expected to decline by 7.4% in 2020 from an initial growth forecast of 0.8%.
The economic meltdown is predicted in face of economic uncertainties posed by liquidity challenges, weak domestic demand, low commodity prices, low production due to Covid-19 induced lockdown, loss of income, below-normal agricultural production on account of drought and increasing inflation.
Analysts have said the restoration of the monetary policy independence following the abandonment of the multi-currency system and the re-introduction of a mono-currency in 2019, has ignited exchange rate induced inflationary pressures and depreciation of the local currency against other strong currencies.
This has negatively impacted negatively on the ability by insurance companies to meet up the expectations of paying the public passenger policy cover in the event of death, accident or injury.
Zimbabwe’s insurance and pension commission (IPEC) in its quarterly report as at March 31 2020, identified risks associated with COVID 19 pandemic and came up with mitigatory measures as part of the Commission’s risk matrix.
In light of these developments, Zimbabwe’s road traffic authority, the Traffic Safety Council of Zimbabwe (TSCZ) spokesperson Tatenda Chinoda has called for an upward review of the public passenger insurance policy cover.
“There is need for an upward review in terms of the premium because there has been inflation to the extent that the amounts referred to like two thousand (ZW 2 000) Zimbabwean dollars insurance cover in terms of death for instance, if checked on the auction system can be two hundred (USD 2 00) united states dollars which might fall below the required amount to offer someone a decent burial.
“The insurance policy cover might not necessarily have come under spotlight due to COVID 19 because it will still cover any passengers in the event of injury, accident or death,” adds Chinoda.
He further explains that the public passenger policy cover regardless of COVID 19 is supposed to be adhered to as part of efforts to maintain health and safety of victims.
“It must give the cover as given in the policy guidelines, so really, it is those operators who operate using fake public passenger insurance covers or counterfeit insurance papers who are a disservice to the generality of the populace who would think that as passengers they have no rights to medication when a crash has happened, right to proper and decent burial in the unexpected event of death due to road crashes.
“Everyone is bound by statutes developed by the government such as Statutory Instrument 144 of 2020 and other relevant statutory instruments in respect of containment and prevention of COVID 19,” said Chinoda.
Most transport operators in Zimbabwe although they agree on the need for an upwards review of premiums; they have also called on insurance companies to be reflexive on claims in the event of death, accident or injury.
They argue that public passenger policy cover is good but insurance companies should be reflexive enough when claiming, strenuous processes such as police reports should be attended to when victims have already been given attention.
“We expect insurance companies to also be flexible in times of needy-the processes of claiming are strenuous that we sometimes feel betrayed.
“They need to also raise more awareness of this policy particularly to marginalised communities if we are to maintain road safety, its an inclusive responsibity”, said a transport operator who cannot be named on condition of anonymity.
The Insurance Council of Zimbabwe has already introduced a computerised automated teller machine that is meant to detect counterfeits policies to protect unsuspecting members of the public.
Already, IPEC Commissioner of Pensions and Provident Funds Dr Grace Muradzikwa has issued a stern warning against criminal behaviour such as fraudulent claims.
As such, she has directed all insurance and pension companies to be fully cognisant of their clients to detect any malpractices.
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