News Africa05 Apr 2021

Zimbabwe:Inadequate disclosure of insurance products engenders distrust

05 Apr 2021

Some local insurers may be failing to provide full disclosure of their products resulting in a lot of misconceptions and distrust about insurance, the Insurance Council of Zimbabwe (ICZ) has said.

The general insurance association said it is concerned over the public's lack of awareness of motor insurance products on the market and their benefits, according to a report by The Herald.

"Most people lack appreciation of the need and use of insurance as a means of preserving their assets. Motor insurance contributes 40% of the short-term insurance sector's gross premium.

"Unfortunately, the public has inadequate information on the types of policies available as well as how to manage their policies to enjoy full benefits of having insurance policies," said ICZ.

"This lack of knowledge is also attributed to the low uptake of the superior insurance covers like the Full Third Party and Comprehensive motor insurance covers.

"For example, there is misconception over the purpose of the Third Party Motor insurance which is wrongly believed to be just for vehicle licensing; yet it actually provides compensation in the event of an accident. There is also the Full Third Party Motor Insurance which is barely known to the public."

The ICZ has embarked on a nationwide campaign aimed at raising awareness of the types of motor insurance polices, insurance as a risk management tool as well as claims processing requirements.

Trust

ICZ CEO Mr Tendai Karonga, acknowledged that consumers have lost confidence in insurance due to lack of knowledge or bad experiences with the claims process.

"Confidence over insurance services continues to be low with the public complaining about non-payment of claims by insurers. Insurers have been blamed for benefiting from premium collections yet abdicating their promise to pay claims hiding behind insubstantial reasons leaving policyholders frustrated," he said.

"The lack of knowledge and mistrust over insurance has kept the insurance's contribution to gross domestic product (GDP) low at 2,97%. This has greatly compromised the insurance's role in the national socio-economic development."

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