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MAKING INSURANCE ALL INCLUSIVE

Quite a huge segment of the Zambian population is underprivileged and due to this lack of privilege, they do not have the capacity or access to benefit from various financial services such as insurance.

This is where concerned authorities such as the Ministry of Finance and National Development as well as the Pensions and Insurance Authority (PIA) step in and help such sections of society to empower them and grant access to financial products and services. 

Micro-insurance is one such effort to help people belonging to the low-income group have access to financial services.

The Zambian insurance industry has micro-insurance products that cut across all demographics, therefore contributing to the country being a financially inclusive country.

These micro-insurance products offer coverage to low-income households or to individuals who have little savings.

They are tailored specifically for lower valued assets and compensation for illness, injury, or death

While these micro-insurance products are being rolled out on the market, there is need for more awareness especially for the targeted audience.

In separate interviews in Lusaka, the capital city of Zambia, some people expressed mixed feelings about the products while others were aware of them but yet to take them up.

The interviews which were taken from one of Lusaka’s busiest trading places called Soweto market also helped people such as marketeers and small business owners to be aware of the micro-insurance products.

FILE PHOTO | Soweto Market

One of the interviewees, Doris Bwalya showed willingness to take up these micro-insurance products as she wants to protect her clothing business.

“I have heard about micro-insurance and I have an idea on what it does and how it can protect my business,” Ms Bwalya stated.

Introduction of microinsurance has provided an opportunity for low income earners to have an insurance cover which will assist them in protecting their small businesses once a loss occurs.

This is a new insurance type designed to embrace low income earners and small businesses especially in the informal sector such as marketeers and welders, among others.

These are people who own small businesses such as marketeers and welders. The type of insurance is meant to ensure that all businesses, especially small ones have insurance policy which will cushion their loss in a case that it happens to their businesses.

Another interviewee, Mumba Mwanza said he was not aware of these micro-insurance products.

According to Mr Mwanza, insurance and all its form is a scam as people are never paid their claims once a calamity happens.

In commenting on the micro-insurance in Zambia, the regulator of the insurance industry, the Pensions and Insurance Authority (PIA) acting Registrar Namakau Ntini said the sector has started to record positive and successful stories regarding micro insurance.

Ms Ntini pointed out that this is testament that the targeted audience is getting more aware of the micro insurance products.

She stated that some insurance entities has so far recorded successful stories on rolling out of micro insurance products to the intended beneficiaries.

“Yes we are yet to get to the scale and reach that we intend to  but our target market are already aware if what it is and certain entities have already gone into the market and were able to sale some of those products,” Ms Ntini said.

She pointed out that the coming in of the new insurance act would provide a more robust regulatory platform which would enhance the rolling out of the micro insurance products as well as other products in the industry.

It is however worth noting that while there are successful stories being witnessed regarding micro insurance products, how they are distributed also matters.

The insurance entities need to come up with innovative ways of distributing these micro-insurance products for them to work. These products also have to be affordable to match the target market.

One of the micro-insurance products is the Domestic Travel insurance is a Pay-as-You-Go being undertaken by Madison Life Insurance Company Zambia limited 

The Madison Domestic Travel insurance is a Pay-as-You-Go Per Trip Cover (maximum seven days trip) and Way-of-Life (Month-on-month multiple trip cover for Life) Policy that covers Accidental Death, Permanent Disability and Accidental Medical Expenses and Hospitalisation arising out of a Road Traffic Accident (RTA) while travelling on a public road within Zambia either for business, recreation, school trip or studies. 

It is however important that as these products are being rolled out, insurance entities should have adequate funds to pay out claims which may arise from policyholders.

Much as seem easy to deal with micro-insurance claims, money is always involved to ensure that the insurance entity paying out these claims is well adequate.

This is where re-insurance comes in to assist. Most insurance take up re-insurance for huge claims and policy holders but that can also come in handy when there are emergencies to do with micro-insurance.

In Zambia for instance, there are re-insurance companies such as KlaptonRe which offers a wide range of products responding to the market needs to ensure the optimal protection of its customers.

KlaptonRe has exceeded K100 million in terms of liquid investments and all these investments are placed right in Zambia.

With such strong figures, it is inevitable that local entities can take advance of re-insurance even as they dealing with micro-insurance product and services.

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