By BUUMBA CHIMBULU
THE enactment of the Insurance Bill will encourage local brokers to participate in the running of financial affairs in the industry, which will boost foreign income, says Insurance Brokers Association of Zambia (IBAZ).
IBAZ president, Emmanuel Kwenda, stressed that one of the biggest challenges brokers were facing was that some companies and some multinational companies would insist that they wanted to deal with a particular international broker.
Mr Kwenda said the enactment of the Insurance Bill would therefore allow local brokers to fully participate in the industry.
This, he said, would allow local brokers to take up 51 percent of the cover with foreign brokers having 49 percent unlike the current situation where an international broker would take up 100 percent of the cover without the involvement of the local firms.
Mr Kwenda was speaking in an interview at the just ended Insurance Conference 2020 held under the theme “Seizing opportunities for growth amidst challenging times.”
“As IBAZ we have no problem with that, but what we are saying is the Zambian brokers should also be given an opportunity to participate in the insurance of the multinationals.
“So if we have a company which is 51 percent owned by Zambians it means that the Zambians will also participate in insuring that particular risk, as opposed to now,” he said.
Mr Kwenda stressed that it was important for Government to expedite the enactment of the Insurance Bill to allow the local players fully participate.
He explained that the enactment of the Bill would encourage local brokers to participate in the running of financial affairs in the industry, which would boost foreign income.
Mr Kwenda said the enactment of the Bill would address the issues of the localisation of the marine industry.
He explained that most of the imports coming into the country are insured from outside, losing foreign exchange hence the need to localise the marine insurance.
“If we are going to have most of our goods coming into the country insured locally it means there will be a higher retention of the premiums,” Mr Kwenda said.
He said the development of the Bill started in 2013 and the Association was confident that it would boost revenue as it prioritise the insuring of assets with local brokers.
Mr Kwenda said the Pensions and Insurance Authority (PIA) through the Bill would have more say on which firms or businesses that are to be reinsured in the country.
“When someone insures an item like a factory, some of the risks is also insured outside the country before reinsurance. But with the coming of the Bill, before someone goes out to insure, they will have to make sure they satisfy the local insurance capacity,” he said.
Mr Kwenda said it was important to share some of the risks with other insurance companies in Zambia, stating that other insurance firms are expected to benefit from the local risks before they can go outside.
By BUUMBA CHIMBULU