Demand for life insurance in Zambia at 5pc

Fri, 17 Feb 2017 09:48:44 +0000

By SHEILA  SAKUPWANYA

ZAMBIANS are reluctant to insure their lives, making life insurance as low as 5 percent, most of which is third party car insurance in the population of over 15 million, says Sanlam Life chief executive officer Simachila Makwembo.

Mr. Makwembo said there was need to create awareness on the need for life insurance to grow in Zambia.

“The media is indispensable in creating awareness and positive opinions on various issues such as life insurance cover in the country,” he said.

He said his company was ready to partner with media specialists who could report favourably on the need for life insurance cover for national development.

“As Sanlam we have realized the need to partner with specialized journalists so as to create awareness and increase the insurers for the nation’s social and economic development,” he said.

He said his company was committed to helping create a world worth living in and enabling people to live their best possible life within it.

Mr. Makwembo observed that 2016 was not a very good year for most businesses, insurance sector included, as the interest rates went up and there was no available credit in circulation which affected the economic performance.

“2016 was a tricky year for the businesses as the interest rates went up from 18 percent and 19 percent to 45 percent and people could not afford loans, hence disturbing the economic performance. There is need to have credit in circulation so that the economy can perform well,” he said.

He noted that it was difficult for most people to access loans because the majority were in informal sector and were not salary backed yet they were the ones in need of loans for investment and insurance cover.

Sanlam Life Insurance, formerly African Life Insurance, aims at changing the perception of insurance through heavy investment in customer service delivery.

“African Life Insurance, now Sanlam Life Insurance, is not just about renaming the company but going after the heavy investment in customer service specializing in life insurance  such that when one goes to our other countries of operation they have the same experience,” he added.

He, however, bemoaned the low capital base allowed for the insurance companies to operate in Zambia yet the risks incurred were huge.

“The law on insurance in Zambia does not allow an insurance company to have huge capital base that can enable us write big companies like the mines. This has a negative effect on the Zambian economy because insurance companies are prompted to insure with big insurance companies outside the country where they pay huge premiums that could be utilized in the Zambian economy,” Mr Simukonde said.

He urged the Government to revise the insurance capital base policy so that the over 34 insurance companies could positively contribute to the development of the country’s economy through retained premiums from big companies.