“banner728.gif"

PIA wants financially sound, reliable insurance providers service Zambian public – Nkwale

THE Pensions and Insurance Authority says it is aware of some of the challenges in the industry, ranging from genuine complaints of unfair treatment of customers, to failure to read the ‘jargon’ at the back of cover notes.

Acting registrar Titus Nkwale said at the 2019 Insurance Week press briefing at the Insurers Association of Zambia (IAZ) that the association was interested in ensuring that the Zambian public was serviced by financially sound and reliable insurance providers.

He said it was also interested in ensuring that insurance companies adopt best practices in the fair treatment of customers and the use/uptake of insurance increases.

He said this year’s theme, “Raising an insured generation” was fitting as financial literacy and wise financial decision making, especially among pupils and students, was being promoted.

Nkwale said over the years, the industry had been recording steady growth.

He said in 2018, the industry recorded an overall increase of 16 per cent in terms of Gross Written Premium (GWP).

Nkwale said in quantum, GWP increased to K3,183 million from K2,739 million recorded in 2017.

He said general insurance business accounted for K1,908 million in 2018 as compared to K1,797 million in 2017 whilst long-term insurance business accounted for K1,275 million in 2018 as compared to K941.6 million in 2017.

He clarified that Gross Written Premium does not represent profit but was the money collected by insurers that is secured to pay future claims.

“On certain policies, the claims can even exceed the premiums that have been paid, which is why a portion of premiums are ceded to reinsurers, for greater financial support. In terms of claims, the industry recorded estimated gross claims of about K1.1 billion compared to K1.01 billion in 2017. This figure represents an industry that is responding to its clients at their point of need. This should help us understand that insurance is there to pay claims that is the whole purpose of insurance as a financial protection tool,” he said.

“However, as the regulator, we are aware about some of the challenges that are in the industry which range from genuine complaints of unfair treatment of customers not being aware of the scope of cover for their product to failure to read the ‘fine print’ or ‘jargon’ at the back of the cover notes. Further, there are also disputes on claim payouts due to non-availability of policy wordings that would have spelt out terms and conditions. Unnecessary delays in getting a claim settled is also another frustration faced by some policy holders.”

He said to respond to these challenges the authority had created a new unit called Market Conduct, which would help with treatment of customers fairly.

“Further, Pensions and Insurance Authority, with assistance from the World Bank, is currently developing key fact statements. Key fact statements are part of disclosure requirements that will assist in clarifying terms and conditions of insurance policies. Further, KFSSs may also assist in improving financial literacy among Zambians and help them make better choices on purchasing of insurance,” he said.

He said it would therefore be mandatory for all insurance companies offering motor, household or contents, home owners, funeral and life insurances to give a key fact statement to improve financial literacy among customers.

“The Pensions and Insurance Authority is interested in ensuring that: the Zambian public is serviced by financially sound and reliable insurance providers; that insurance companies adopt best practices in the treatment of customers fairly; and the use/uptake of insurance increases. In light of this, we will continue to supervise the industry with a view to promoting innovation, quality customer service and greater contribution to GDP,” said Nkwale.

Leave a Reply

Your email address will not be published. Required fields are marked *