News Africa28 Oct 2019

Zimbabwe:Slow progress in digitisation in insurance industry affects rural sector

28 Oct 2019

Unhurried technological change in the insurance sector which has disadvantaged existing and potential insurance buyers particularly in rural and marginalised areas have left them wondering why players in the sector are not hopping onto the digital wagon fast enough.

The local insurance market’s reliance on physically providing services is strenuous because of distance constraints. For example, rural folk cannot be in towns every now and then, according to a report on the information site 263Chat.

The snail's pace in digitisation in Zimbabwe has led to a situation where insurance appears to be restrictive, only sold to the affluent in society which further buttresses the already held conception that insurance is for the elite.

Those in rural and marginalised areas in Zimbabwe, who constitute a large part of the population, are normally sidelined from insurance related information which can otherwise motivate them to take up insurance products.

ZimSelector.com business development director, Ms Zelina Francis, urged insurance companies to move with the times and introduce local remedies for local problems. “Simply because a segment doesn’t actively demand insurance, it doesn’t mean they do not want or need it. They may be unaware of (or may not understand) the benefits that an insurance policy provides.” They are in need of insurance related information, she added.

Economist Benedict Marufu said, “The use of digital tools in insurance particularly among rural communities has the potential to facilitate client uptake, reduce transaction costs, improve efficiency of the insurance process from registration to premium payment to claims processing, and increase household resilience to respond to external shocks while ensuring stability, growth, and sustainability of agricultural value chains.”

Insurers say

While agreeing that digitisation is the way to go, traditional insurers who spoke to 263Chat pointed that digitisation has its own challenges that have caused progress to be slower than expected.

Zimnat Insurance group chief digital officer, Oswin Zulu, said, “Insurance is a risk management business. Digitisation offers new capabilities but inherently introduces risk.

“Balancing exploring new unchartered waters and optimising traditional business operations is never easy. This, coupled with the cost of acquisition of technology and scarce human expertise, have made the journey slower for the whole industry. Customer demands and the changing ecosystem will however introduce change.”

On the other hand, some organisations like ZimSelector.com, Zimbabwe’s first online comparison site for financial services, are trying to make the provision of insurance services convenient for everyone. Launched in 2015, ZimSelector has partnerships with some of the most trusted brands like Zimnat Group, Old Mutual Group, Nicoz Diamond, CBZ Bank and Insurance, CABS, CIMAS, NMB Bank among others. It allows potential insurance buyers to compare quotes, and buy products online in a matter of minutes regardless of location or time.

 

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