Insurance firms set aside $300m for housing schemes | The Herald February 23, 2016
Sydney Kawadza Senior Writer
Life Insurance Companies in Zimbabwe have set aside more than $300 million for low cost housing schemes to broaden their investment portfolios in a challenging economic environment.
In an interview during the official opening of the Life Association Offices of Zimbabwe in Harare last week, LOM chairman Simon Chapereka said the liquidity crunch has severely affected life insurance companies hence the need to diversify investments.
“Our clients are struggling due to the economic environment and as life insurers we know people cannot do without life cover so we have moved to diversifying into viable products targeting small to medium business enterprises, agriculture and the informal sector.
“It is in this context that the life insurance companies have moved into housing development investing more than $300 million in these projects,” he said.
The LOA is a representative body of all life insurance companies in Zimbabwe with a membership including Fidelity Life, Old Mutual Life Zimnat Life, First Mutual Life, CBZ Life, Nyaradzo Life and several other re-insurers such as FBC Re-insurers. The association has also set up a housing fund of $50 million.
Individual companies such as Fidelity Life and Old Mutual Life are involved in housing developments including the Southview and Budiriro Housing Schemes in Harare respectively.
Officially opening the offices, the Commissioner of Insurance, Pension and Provident Funds Manet Mpofu urged life insurance companies to invest in prescribed assets so that Government can provide other basic services.
“It is unfortunate that the tough economic environment our country is currently experiencing has resulted in many buildings being either unoccupied or partially occupied, thus depriving pension fund members and policyholders improved benefits.
“Although we sometimes tend to look up to Government to improve the operating environment, we need to remember that Government needs funding to carry out its programmes such as Zim-Asset.”
Mrs Mpofu said investing in properties will also benefit policyholders and pension fund members while giving a good return on investment.
“Needless to say, a good return on investment should result in a positive impact on benefit payouts.
“We are aware that a good number of LOA members have invested in property development, mainly, low cost housing.
“This is indeed a step in the right direction although we should not ignore such things as dam construction and power generation,” she said.
The LOA was set up in 1958 alongside the Insurance Council of Zimbabwe with the latter’s secretary general running the former’s activities until 2013.
The association appointed a substantive secretary general while decided to acquire its own premises leading to the purchase of LOA House.
The LOA House also offers conferencing facilities for hire.