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The Insurance Institute of Zimbabwe annual conference was held in Bulawayo last week.
Finance Minister Tendai Biti wants an explanation regarding paltry benefits being paid by the insurance companies to policyholders.
The companies allege that their contributions were wiped out by inflation.
Some insurance policyholders have been receiving as little as US$20 payoffs per month.
ZimIPR general manager Mr Martin Tarusenga said that an address by former Old Mutual Zimbabwe group chief executive Mr Luke Ngwerume at the conference was unfortunate.
Mr Ngwerume described the insurance sector as the “fall guy” in the economic meltdown.
“It is normal that whenever there is an adverse condition there is always a fall guy. No one is talking about savings that were wiped out in bank accounts,” said Mr Ngwerume.
“I, however, reckon that with banks, they can always show you your Zimdollars account although the money is useless.”
Mr Tarusenga said the losses from a bank account could not be compared to that arising from a pension contract, as they were fundamentally different.
“The difference is the short-term nature of bank accounts or contracts and the long-term nature of insurance and pension contracts, and the risk exposures thereof,” said Mr Tarusenga.
“Showing anyone Zimbabwe dollars in their bank accounts deposited in 2008 is a totally different matter to showing the individual an account with monthly deposits made starting from the 1970s, as with insurance and pensions.” He reiterated that the monthly outlays into pension contracts for 10-30 or 40 years was clearly worth much more and could not just be ignored.
Mr Tarusenga maintained that the difference in banking and insurance was well-known in the financial services sector and underlined the difference in contract designs and specifications. He also castigated suggestions by Mr Ngwerume that the companies should have been allowed to invest part of their money offshore to hedge against losses that could occur.
Said Mr Ngwerume: “If we’d been allowed to invest offshore we could have been able to pay more than the US$50 that is being offered to affected policyholders now.”
However, Mr Tarusenga said that these were nothing but mischievous ways of trying to find an easy way out.
“In which new areas outside the country could they invest our money, which were not here already? This shows the calibre of insurance executives we have who don’t possess risk management skills,” he said.
“There are many investment opportunities that would have succeeded here including property, Government and corporate bonds among many others.”
Minister Biti is on record saying that he was one of the affected contributors and had a policy since 1994 with a sum assured of Z$50 million, but had never received a cent.
Senior managers and decision-makers in the industry attended the annual conference in Bulawayo, which ran under the theme “Insurance the engine for national development, consolidating growth in financial services”.
Online Reporter