Zimbabweans prepare more for death than life with 76% of all insurance taken being funeral policies, Old Mutual Zimbabwe Group CEO, Samuel Matsekete has said.
The uptake of life policies is low and the figures are
taken from the Insurance and Pensions Commision (IPEC) report of 2019.
Matsekete was speaking at the Great Zimbabwe University
(GZU) Vice Chancellor’s Invitational Public Lecture Series on Friday last week.
He also said that apart from funeral policies, there is
also a tendency for people to take medical aid which means that they are more
cognisant of long life and death.
“When you look at statistics, you see that people spend
more in medical aid and the reason is they want to live longer but they skip
the savings to take care of themselves as they live longer and jump that phase
to prepare for death. They want to be well, and they are preparing very well
for that then they want to know that they will be buried decently,” said
Matsekete.
He emphasised the importance of savings from individual
level to national level adding that long term savings and insurance are a
critical part of sustainable economic development.
“We must promote a culture of savings through private or
domestic arrangements, broad based aggregated savings arrangements, promoting
capital market such as public listings, and the issuance of other securities
for specific projects is part of enabling long term savings because then assets
that can generate returns are visible and accessible to those that are saving.
They can make choices and decisions and can optimise their savings,” said
Matsekete.
The theme of Matsekete’s presentation was “Long term
savings, insurance and infrastructural development of Zimbabwe”.
“One of the risks that people will always be aware of is
death. In our insurance sector today, in the life premiums when we analyse
them, we actually see that there is more funeral premium provision than life
which means that we prepare more for this event called death than we do for
living longer,” said Matsekete.
Insurance and Pensions Commission (IPEC) Public Relations
Manager, Lloyd Gumbo said, according to the 2019 IPEC Baseline Survey on
Insurance and Pensions Awareness and Uptake, about 76% of the people with
insurance, had funeral policies.
He attributed it to the defined benefit characteristics of
funeral assurance products and that funeral premiums are relatively cheaper
compared to life assurance products.
“This high uptake of funeral policies could be attributed
to the defined benefit characteristics of funeral assurance products where
people with valid policies receive services such as bus, hearse, and the actual
burial of the deceased.
“The other factor could be that funeral premiums are
relatively cheaper compared to other life assurance products,” said Gumbo
Old Mutual Managing Director-Life Assurance, Rutendo
Magorimbo said on the risk side, there is more funeral and short term products
rather than savings. Masvingo Mirror
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