Source: The Herald – Breaking news.
LOA Secretary General Mr Rufai Mavukeni 
Nelson Gahadza
Senior Business Reporter
The Life Officers Association (LOA) says sector players should take advantage of the prevailing stability to build resilience in Zimbabwe’s life insurance industry, which is key in mobilising long-term savings for the economy.
LOA represents life insurance companies in Zimbabwe and was established to promote the industry’s growth and sustainability. It also collaborates with regulators, policymakers, and financial institutions.
The insurance and pensions industry’s penetration rate, which peaked at 5,7 percent in 2004, is currently at between 1,5 and 2 percent.
Stakeholders that include sector players, the Government, and the Insurance and Pensions Commission (Ipec), are engaged in initiatives to restore trust and grow the penetration rate.
LOA Secretary General Mr Rufai Mavukeni told media engagement on Friday said to build resilience in the sector, assets related to the customers need to be protected.
“Currently we are in a multi-currency environment, but we are proposing that by 2030 we should have a mono-currency arrangement.
“As the industry, we are saying from experience the assets related to our policyholders need to be protected to avoid loss of value that has happened before,” he said.
Mr Mavukeni said in the future, the industry would work with policymakers to come up with policies that will protect the assets against inflation.
“We were allowed to start investing offshore last year to protect some of the values that we hold on behalf of our customers.
“However, the procedure to invest offshore will be simplified this year, and that will allow us to be able to raise our investments outside,” he said.
The Justice George Smith-led Commission of Inquiry set up by the Government in 2015 found that some policyholders and pension scheme members were prejudiced by the conversion process during dollarisation and recommended they be compensated.
The commission blamed the value erosion on poor regulatory enforcement and the demonetisation of the local currency.
From these experiences, policyholders and pension scheme members feel that they were shortchanged, and as a result, their confidence in insurance and pensions industry ebbed.
As part of efforts to finalise the compensation, Ipec has since halted the dissolution of pension funds pending the conclusion of pre-2009 compensation to ensure fairness among members.
Compensation is one of the initiatives recommended by the Government to restore confidence within the pensions and financial services sectors.
As a result, the government set aside US$175 million towards that effort, and pension funds were asked to come up with their frameworks and payment plans.
Mr Mavukeni said after 2030, either the multicurrency regime should continue or the investment that has been made should be ring-fenced in order to protect policyholders.
“But we are proposing that beyond 2030 the multicurrency regime should continue given a semblance of stability in the currency market. It is the stable currency that we are looking for so that our industry can grow,” he said.
Mr Mavukeni said the industry should also be innovative and invest in alternative asset classes that can be able to save the value of investments.
“We are encouraging our members to be innovative and invest in information technology (IT). For instance, through IT, that is how Ecosure Life is meeting the market,” he said.
He said the members should also be more involved in investment on the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX).
“We would like the Securities and Exchange Commission of Zimbabwe (SecZim) to deepen the investment market so that we are given more options to invest our savings. That way we can create value for the customers,” said Mr Mavukeni.
He said policymakers should ensure consistency of policies to sustain a stable environment where the industry is able to trade without fear of losing value.
“We also believe that our industry should be involved in the modern system of investment, such as issues like blockchain and mobile money platforms that are very useful in today’s world. ‘They improve transparency, efficiency, and premium collection,” said Mr Mavukeni.
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