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Michael Magoronga, Business Correspondent
THE Insurance and Pensions Commission (IPEC) has raised concern over the increase in number of fraudulent claims in the insurance and pensions sector.
Speaking to journalists during a virtual 2020 insurance and pensions mentorship programme yesterday, IPEC Commissioner of Insurance, Pension and Provident Funds, Dr Grace Muradzikwa, said between 25 and 30 percent of claims being submitted by clients were fraudulent.
This, she said, was indicative of criminal behaviour related to the harsh macro-economic environment, which was being further compounded by Covid-19 shocks.
“The harsh economic environment has resulted in an increase in insurance fraud. You find out that more than 30 percent of claims that are currently being processed are fraudulent owing to the harsh economic environment,” she said.
As a panacea, Dr Muradzikwa said, in as much as it was a criminal offence, IPEC was moving in to ensure that players in the insurance sector understand their clients as well as monitor certain trends.
“We are urging our players in the sector to quickly report such cases to police so that they can be quickly investigated and such culprits be prosecuted.
“In the same vein we are also encouraging players to understand their clients and identify certain trends within the insurance industry,” she said.
Despite the challenges being faced in the sector that have resulted in low confidence mainly owing to loss of value as a result of hyperinflationary legacy issues and low uptake of insurance products, the insurance sector has managed to remain resilient and exhibit steady growth.
“Notwithstanding the macro-economic challenges and the global Covid-19 pandemic, the industry remains resilient as indicated by the ability to continue operating and paying claims and benefits even during Covid-19 induced lockdown,” said Dr Muradzikwa.
“The pensions sector had growth in asset base, an increase of 843 percent from June 2019 to June 2020, which is above the June annual inflation rate of 732 percent,” she said.
According to IPEC, the insurance sector paid about Z$726 million in claims from April to June 2020, while the pensions sector paid benefits worth Z$483 million for the same period.
The training for journalists has become part of the calendar annually but this year it is being held virtually due to Covid-19 induced travel restrictions.
The mentorship programme is meant to capacitate journalists, who are drawn from across the country, and ensure that they report factually and from an informed position on insurance and pensions issues.
Online Reporter