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Insurance myths hinder growth

By BUUMBA CHIMBULU

A NEGATIVE perception about the insurance industry and several myths have contributed to the low uptake of insurance products currently at five percent, a situation which needs to urgently change.

This was observed by the players in the insurance industry and policy makers in Lusaka at the on-going annual insurance conference where they have gathered to find solutions on how to create a positive image about the industry in the country.

This year’s annual conference is being celebrated under the theme “Enhancing the role of insurance to support economic growth.”

This perception needs to change, according to the Insurers Association of Zambia (IAZ) Executive Director, Nkaka Mwashika.

Mr Mwashika emphasised the need to dispel several myths about insurance, if people’s perception was going to change.

“According to the 2020 finscope survey, the majority of people who do not use insurance either do not understand how it works, think it is too expensive, or feel do not need it. This perception needs to change,” Mr Mwashika said. He said some players needed to rethink how they dealt with comments on various platforms such as radio, newspaper and social media.

IAZ president, Christabel Banda, said public perception of insurance was among the focal points of the conference.

Ms Banda the conference would look into the outcome of the research that was conducted and analyse the current perceptions of insurance. “We will also discuss how to get from where we are with uptake of insurance by Zambians at five percent of the adult population to having the majority of Zambians will make use of the insurance service,” she said.

Meanwhile, Finance and National Planning Minister, Situmbeko Musokotwane, said the insurance industry had an important role to play in terms of educating the public and enhancing public perception.

Dr. Musokotwane emphasised that a positive perception on insurance could only be formed when all players in the industry are aware of the consumers’ expectations from all providers.

He observed in a speech read for him by his permanent Secretary for Economic Management and Finance Danies Chisenga,  that timely settlement of claims as this will lead to a satisfied client who in turn will serve as ambassadors of the industry. “It is not possible to enhance public perception without a robust system for responding to complaints and resolving grievances. Therefore, it is vital that the whole industry perfects and effectively implements the process of handling customer complaints,” Dr. Musokotwane said.

Pensions and Insurance Authority (PIA) acting Registrar, Kabisa Ngwira, said the authority was looking forward to the operationalization of the Insurance Act that would lead to expanded landscape of insurance services through the introduction of microinsurance business, enhancement of treating customers fairly framework, strengthened risk based capital adequacy framework and the enforcement provisions for the authority.

Ms Ngwira said however, that the industry still faces challenges particularly with respect to claims settlement and this is primarily due to poor financial soundness of some companies.

She said failure to settle claims promptly, therefore, affects the way the policyholder views the insurer and the entire industry.

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