Life Insurance Uptake On The Increase

Life insurance policies uptake across the country is on the increase following comprehensive digital communication efforts by most insurance companies regardless of the recent upward revision of premiums.

By Noah Kupeta

Life insurance involves the pooling of resources through the payment of premiums in order to cover life related risks such as death, accident, retirement and funeral among others.

When the risk materialises a payment is made from the pooled resources. Experts say everyone needs life insurance because at one stage in life the insurance needs will have to be taken care of. The life need, the accident need, the funeral need and the retirement need are everyday realities of life.

Moonlight Provident Associates Public Relations Officer, Noway Museba said the bulk sms system increased uptake of life insurance products by over 90% regardless of the current upward revision of premiums in line with the current macro-economic environment in Zimbabwe.

‘”The bulk sms system is very effective and response rate is very good (90% +).

‘’With bulk SMS we are geared towards understanding and exploiting the interaction between consumers and digital technology.

‘’There is a wider reach and it is cost effective. Even in remote areas they receive messages. To us, it’s an effective communication tool and SMS bounce rate is very low,’’ she said.

Moonlight Provident Associates is senting sms to their clients on life assurance saying “dear policyholder, premiums were reviewed upwards on 01/08/2019. Visit the nearest Moonlight office to regularise your policy. Thank you-Moonlight”.

Life Offices Association Secretary General Mr Mavukeni Rufai, concurred with Ms Museba and said the industry is creating a cocktail of measures and strategies that are meant to keep the industry afloat.

‘’The industry is looking at investments that trail inflation in order to protect policyholder funds. Industry has therefore proposed that government consider bonds and proffer a formula.

‘’In the meantime industry is looking at alternative investments that will protect the value of investments to safeguard life insurance,’’ he said.

Most life insurance policy holders confirmed that regardless of the upward revision of premiums at about 100% using the interbank bank market rate by insurance companies such as Nyaradzo and Moonlight Provident Associates, they need the policies for dignified funerals.

‘’ Nyaradzo sent me an sms confirming an upward revision of my monthly premiums, I will keep on subscribing because life assurance is a necessity.

‘’ It is not about high premiums but the service which comes along with the premiums, my expectation is that they should also increase service delivery in line with their charges,’’ a said policy holder ( name withheld for ethical reasons).

However, although life insurance policies uptake remain high, there is need for insurance companies to penetrate the rural market. Social media communication expert, Mr Boniface Mhlanga, encouraged insurance companies to come up with digital communication strategies that are rural based.

“Insurance companies should engage the rural folk bearing in mind the digital divide, in fact, that is where most people are living, they should embark on road shows, physical visits to penetrate such markets.

‘’ Social media platforms although they are cost effective, the bulk sms system is cheaper particularly for the rural people

‘’They need to develop a more universal digital communication system, user friendly websites that are also interactive,’’ he said.

Regional markets such as South Africa are moving towards digital unified insurance system, something Zimbabwean insurance companies can adopt.

A broad-based consultation and communication of life insurance require the development of coalitions of interest within government, and between government and civil society. This will help secure meaningful public support for life insurance, which is critical to its effective implementation.

The primary outcomes of these activities will be, in the near term, reduce anxieties and fears of stakeholders about the implementation of life insurance products and the consequences for themselves about the imagined changes to the insurance industry.

The insurance needs consists of life, accident, retirement and funeral needs are always available in our lives as long as we are able to earn an income.

It is therefore necessary for people to be covered as early in life as possible because no one knows when these risks covered will materialise.

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