Rural Dwellers Affected By Slow Progress Towards Digitisation in The Insurance Sector


Traditional insurance providers’ leisurely pace towards digitisation is having a negative impact on people living in rural and marginalised areas as the conservative methods make it problematic for them to access information and take up insurance products, experts have said.

By Tendai Makaripe

Digitisation in the field of insurance has been defined as “changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business, and more generally, people’s thinking”.

Globally, most insurance companies are going through digital metamorphosis in order to optimize the end-to-end customer experience which helps them expand their footprint and leveraging low-cost digital distribution channels for sales and service, which eventually deepens their market penetration.

Unfortunately, in the Zimbabwean case there has been unhurried technological movement in the insurance sector which has disadvantaged existing and potential insurance buyers particularly in rural and marginalised areas leaving them wondering why players in the sector are not hopping onto the digital age.

The local insurance market’s reliance on physically providing services is strenuous for one who has distance constraints like the rural folk who cannot be in towns every now and then.

Insurance players in the western world have since redefined numerous areas of their businesses, from product development to distribution strategies to customer interactions and are coming up with customizable and digitally-ready products that are distributable on digital sales channels while at the same time reducing communication barriers and interacting with customers in a more personalized and engaging way.

This has been made possible by a boom in InsureTech organisations which can be described as “Insurance companies, intermediaries or insurance value chain segment specialists utilising technology to either compete or provide valued-added benefits to the insurance industry.”

The snail pace movement in digitisation in the Zimbabwean case has led to a situation where insurance appears to be restrictive, only sold to the so called affluent in society which further buttresses the already held conception that insurance is for the elite.

It is sad that the players who should be encouraging the uptake of insurance by all means necessary are contributing to the solidification of this very dangerous misconception.

Those in rural and marginalised areas in Zimbabwe which constitute a preponderant part of the population are normally side-lined from insurance related information which can motivate them to take up insurance products.

Speaking at a journalism mentorship program workshop organised by, IPEC and NSSA,, business development director, Zelina Francis urged insurance companies to move with the times and come up with local remedies for local problems.

“Insurance is sold, not bought,” said Francis, and added: “And simply because a segment doesn’t actively demand insurance, it doesn’t mean they do not want or need it. They may be unaware of (or may not understand) the benefits that an insurance policy provides. They also may not trust the current insurance agencies or may have access to affordable products.”

This means that this section of the population is in desperate need of insurance related information which they are unfortunately not getting.

I have a blurry understanding of insurance and its importance and would love to access it and make a decision on whether to take it up or not. Unfortunately, as rural dwellers we do not have that information. Maybe it is because it is expensive and they do not think investing in means to communicate with us is necessary,” said Charles Gatau, a Goromonzi based farmer.

Insurance expert, Luckmore Lobo, notes that if technology can be fully embraced, it will become easier for traditional players to capture the rural market which appears to be currently side-lined while satisfying their insurance needs.

“Technology has revolutionised the global insurance sector and its high time our local players effectively embrace it for their benefit as well as for the market.  For example, between 2014 and 2015, the number of mobile insurance policies issued worldwide increased by 68 percent, to a total of

31 million policies but only 7 percent of these new policies are in agricultural insurance, which shows a tremendous opportunity in the sector that can be captured,” he said.

Experts canvased by this publication noted that this low uptake of insurance by the rural clientele can be attributed to lack of awareness and understanding about insurance among households, high overhead costs associated with the collection of actuarial data, monitoring for moral hazard, and the validation and payment of claims; and the limited availability of insurance products that meet the needs of poor and low-income farmers.

However, using technology to reach these markets can be a big step towards capturing the market and providing them with services that address their needs.

“The use of digital tools in insurance particularly to rural communities has the potential to facilitate client uptake, reduce transaction costs, improve efficiency of the insurance process from registration to premium payment to claims processing, and increase household resilience to respond to external shocks while ensuring stability, growth, and sustainability of agricultural value chains,” said economist, Benedict Marufu.

While agreeing that digitisation is the way to go in this modern era, traditional insurers who spoke to 263 Chat pointed that it is not without its own challenges and these hindrances have caused progress towards digitisation to be slower.

“Insurance is a risk management business. Digitisation offers new capabilities but inherently introduces risk,” said Zimnat Insurance group chief digital officer, Oswin Zulu.

“Balancing exploring new unchartered waters and optimising traditional business operations is never easy. This coupled with the cost of acquisition of technology and keeping a scarce human expertise have made the journey slower for the whole industry. Customer demands and the changing ecosystem will however introduce change,” he added.

However, the local situation is not dire as some organisations like, Zimbabwe’s first online comparison site for financial services is trying to make the provision of insurance services convenient for everyone.

Launched in 2015, it features partnerships with some of the most trusted brands like Zimnat Group, Old Mutual Group, Nicoz Diamond, CBZ Bank and Insurance, CABS, CIMAS, NMB Bank among others.

It allows potential insurance buyers to compare quotes, and buy products online in a matter of minutes regardless of location or time which has gone a long way in bringing convenience to the sector.

Speaking of these relatively new developments, Zulu pointed out that they are constantly looking for innovative ways to bring convenience to clients and are exploring avenues that will include “adopting latest technology or refining the manner we interact with our customers so that they have a unique customised experience.”

It remains to be seen whether or not the digital train will accelerate in Zimbabwe and benefit the marginalised communities in the country but what cannot be denied is the power of technology in enhancing insurance service to people regardless of geographical location.

The earlier traditional insurers take this seriously the better for the sector and its publics.

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