adminFrom Walter Muchinguri in Victoria Falls
INSURANCE companies have been urged to prioritise risk management and innovation in order to grow their businesses. These were the major talking point during the opening sessions of the 2013 Insurance Institute of Zimbabwe annual conference in Victoria Falls yesterday.
FML Holdings chairman Mr Oliver Mutasa, who presented a paper on using innovation to exploit opportunities in the insurance sectors said insurance companies should innovate because the current penetration rate in the sector was only 6 percent.
He added that insurance companies needed to approach the issue of innovation from a holistic point of view.
“Innovation is not just about coming up with something new, it is also about breaking down boundaries and adding value to your customers.
“There is a misconception that when we talk of innovation we are talking about a company’s product, it goes beyond the products because it touches all facets of the company,” he said.
Mr Mutasa said that apart from focusing on the product, insurance companies also need to come up with innovative policies or strategies that help improve their customer service, operations, marketing, business models, technology and channels of disseminating products.
He, however, noted that most insurance companies were being hamstrung from innovating due to their weak balance sheets and lack of skilled staff that could spearhead innovation.
The FML chairman said in terms of the three categories of insurance innovators which are pacesetters, fast followers and survivors, most insurance companies in Zimbabwe were in the survivor category.
“Although there are financial challenges we need to ensure that the IIZ and our universities offer the appropriate training that will allow insurance companies to recruit employees that will spearhead innovation because we need to lay the basis to increase our balance sheet and that come about through innovation,” he said.
He added that although most insurers were in the survivor category there are some companies that were now in the pacesetter category notably Nyaradzo, which has modelled its business around African ethics, Cell insurance which has teamed up with Econet on the Ecofarmer product.
He said insurance companies need to emulate such innovative products and business models so that they move up in category from survivors to fast followers.
Champions Insurance managing director Mr Nathan Chikono, in his paper on enterprise risk management: the present and the future, said insurance companies need to come up with strategies that ensure the identification and management of risk in all facets of their business.
To this end he said that there was need for insurance companies to ensure that they identify the risks in each department and the employees in those sections that are responsible for anticipating the risk and for dealing with it.
“We need to manage risk by ensuring that we appoint the right people to manage risk, it should not just be a management function but should be a responsibility of every employee.
“The time for rudimentary approach to risk management is gone, we need to adopt best practices in risk management, which will ensure discipline at all levels,” he said.
The IIZ annual conference which is ending on Wednesday is running under the theme “Shaping the future of insurance in Zimbabwe.”
Online Reporter