Insurers pay US$5,6m for Tokwe-Mukosi

LOCAL reinsurers last year paid out €3,5 million (US$5,6 million) to compensate for losses and damage occasioned by flooding from Tokwe-Mukosi Dam in Masvingo.

It is believed that freak weather conditions will become costly in future.

Extreme weather conditions such as flash flooding are currently weighing on insurers and reinsurers as claims continue to rise.

The true extent of loss and damage, including the resultant claims, remain unknown.

Last year, rising waters breached the 680m high Tokwe-Mukosi Dam wall – currently under construction – flooding the river basin and displacing 20 000 people and 18 000 cattle, goats and donkeys.

The floods destroyed homes, schools and other critical public infrastructure. At least 2 300 children were forced out of school at the time.

Incessant rains in low-lying areas have caused flash floods in areas such as Muzarabani, destroying crops and public infrastructure such as roads, bridges and clinics.

Other areas such as Harare have been affected as well.

Baobab Reinsurance operations director Mr Tarupiwa Tarupiwa told The Sunday Mail Business that the impact of bad weather conditions on claims could not be readily assessed as a lot of them were retained on policies kept by the underlying insurer.

“Given that the majority affected are uninsured, emphasis is more on selling micro insurance as a way of minimising the impact of the risks on the low income.

“With micro insurance the idea is to develop appropriate products that not only address the low income levels but the seasonality of the income inflows derived primarily from agricultural activities,” said Mr Tarupiwa.

The rainy season is usually associated with road traffic accidents.

Mr Tarupiwa added that research is currently being made to ascertain primary agro climatological and incomes data at household level.

This would help ascertain the geographic location, frequency and severity of natural disasters for a sustainable pricing model that is both affordable and profitable.

Two bodies have recently been created on the continent – the African Insurance Organisation and the African Centre for Catastrophe Risks – to generate data to aid modelling and risk mapping of natural disasters including earthquakes, floods and droughts; and to facilitate appropriate pricing that will indemnify the rural poor in the event of these disasters.

Last year insurers worldwide paid out in excess of US$30 billion on climate-linked claims.

Champions Insurance managing director Mr Nathan Chikono said there was scope for increasing awareness among Zimbabweans on the need to insure against natural occurrences such as flooding and hailstorms.

This, he said, would reduce pressure on Government, which will be compelled to overstretch the little available resources to assist victims of natural disasters.

“Natural disasters are insurable, and insurance companies have different products to cater for such,” said Mr Chikono.

It is believed that farmers, especially small holder farmers, are often reluctant to part with their hard earned cash in premium payments.

Yet the same farmers would need help when their crops meet the wrath of unforeseen disasters.

“Natural disasters are high in severity. We need to take insurance especially to rural areas. With catastrophe insurance, one can be cautioned against such abnormal events,” explained Mr Chikono.