All is not well in insurance sector: Chinamasa

Source: All is not well in insurance sector: Chinamasa – NewsDay Zimbabwe June 27, 2017

FINANCE minister Patrick Chinamasa says the establishment of the insurance road fund reflects that all is not well in the insurance sector and the players themselves need to change their mindsets and accept responsibility of claims immediately.


Chinamasa was speaking at the official commissioning of the Insurance Council of Zimbabwe (ICZ) head office in Harare yesterday, where he said insurance companies’ outlook had to change.

“Clearly, obviously your instinct to say ‘how much’ that I can understand, but at the very least, where unless there is strict liability, please accept responsibility immediately and then indicate to the claimant that it is only an issue about the quantum and not the liability,” he said.

“It is really such attitudes (of refusing claims) that can give rise to some of the initiatives that I think are not in the right direction like the establishment of insurance road fund.

“That (insurance road fund) basically is reflecting that all is not well in the insurance sector and we need to put our house together, our act together, so that we are seen to honour our obligations.”

This comes as the Transport and Infrastructural Development ministry is planning to create a Road Accident Fund to assist victims of road accidents, which would be funded by the government.

Though it is unclear how the proposed fund would be resourced, indications are that government could make taxpayers pay for it by introducing new fuel and road levies or other types of levies.

With government revenue already low and Auditor General Mildred Chiri’s 2016 report showing that government has not maintained proper records for certain expenditures, the idea of the fund has not been met well.

ICZ chairman, Brilliant Shumba said from what they had seen, the real problem in getting insurance players to pay up claims was the issue of perception and that they sometimes acted unfairly.

In the Insurance and Pensions Commission report for the year ending December 31, 2016, life companies owed policy holders $2,9 million from $3,3 million in 2015.

An analysis, for that period, found some players had aged claims of more than 121 days.