adminmulticurrency in 2009.
This comes as Minister Biti has written to the commissioner of Insurance and Pension Funds demanding an explanation regarding paltry benefits.
Mr Ngwerume, who was presenting a paper on securing the relevance of the insurance sector in a changing Zimbabwe, said it was critical for the sector to state its position on the matter as part of its confidence building process.
“We have to do something. We need to take part in the conversation lest other people outside the industry arrive at their own conclusions. We all know what happened, we need to pinpoint the cause because if we do not do that we will pay a huge price as we continue to grapple with issues around relevance,” he said.
“It is always normal that whenever there is an adverse condition there is always a fall guy and in this case it is the insurance sector. No one is talking about savings that were wiped out in bank accounts. I, however, reckon that with banks they can always show you your Zimbabwe dollars account although the money is useless,” he said.
He said there was need to engage professional bodies to help lobby on behalf of the industry to strengthen its position. In addition, the industry needed to engage those clients that are well versed on what happened to testify on its behalf.
Mr Ngwerume said by responding to the allegations, the sector will be addressing three critical areas affecting it: loss of confidence, skepticism and antagonism.
Apart from addressing the allegations, the industry also needed to look at six critical areas: governance, leadership, products, distribution and investment in order to address the three key threats that it is facing, he said.
On governance, he said insurance companies needed to deal with internal governance issues to ensure transparency and ethical behaviour. In terms of product, he said there is need to develop simple products that address the needs of the client.
He added that insurance companies needed to be transparent and deliver on the promises that they make to their clients upon the implementation of the policies.
Mr Ngwerume said there was need for insurance companies to integrate to digital platforms such as Internet as the world was going digital.
He said local insurance companies should take advantage of the increase in tele-density and use of smart phones in Zimbabwe to market their products on the Internet and social platforms.
He said insurance companies should invest the money they collect wisely in investments that offer a reasonable rate of return. He, however, called for a special dispensation that allows insurance companies to invest part of their money offshore to hedge against losses that may occur.
“If we had been allowed to invest offshore we could have been able to pay more than the US$50 that is being offered to affected policy holders now,” he said.
He said investing offshore would also help hedge insurance companies against a repeat of what happened in 2009.
Speaking at the same occasion IIZ president Mr Simon Chapereka said the sector was committed to playing a pivotal role in the growth of Zimbabwe through the mobilisation of savings to facilitate commercial transactions and the provision of credit.
“Our desire is to increase our contribution to economic growth through offering suitable insurance solutions for our people. The theme of this conference was therefore decided on the recognition of the country’s stability and how the industry could participate more in national development and in consolidation of growth in financial services,” he said.
The annual conference, which is being attended by senior managers and decision-makers in the industry is running under the theme “Insurance the engine for national development, consolidating growth in financial services”.
leeroy