Sundaymail Editor
Tawanda Musarurwa
The importance of capacitating children and the youth in Zimbabwe with financial literacy skills is borne out in the fact that the country has an “extremely youthful population.”
“Approximately 6 million people living in Zimbabwe are under 15 years old (43 percent of the total), and the population is therefore overwhelmingly young,” said Finmark Trust in a 2020 report on Zimbabwe.
Within a few years, these youths will be entering the economically active population, and they will need proper skills to make solid financial decisions.
Insurance is part of the broader scope of financial literacy, but an informal survey by The Sunday Mail showed that children and the youths have very limited comprehension of what insurance entails.
Even in this day and age, a good number of people only discover insurance when they are compelled to sign up for funeral and/or health insurance on their first jobs, or when they buy their first cars and realise they have to comply with the statutory third-party insurance.
However, that is tantamount to teaching old dogs new tricks.
The numbers do not lie: According to a 2019 Baseline Survey on Insurance and Pensions Awareness and Uptake, which was carried out by the Insurance and Pensions Commission (IPEC), nationally, 34 percent of Zimbabweans had at least one insurance policy, while the balance (66 percent) had no insurance policy of any kind.
Of the 34 percent who had any insurance, 76 percent used funeral insurance, while 20 percent were on motor insurance.
There is a clear correlation between financial literacy (or lack thereof) and the level of financial inclusion.
Financial experts say financial literacy, like most knowledge, is better grasped at a very young age.
The Organisation for Economic Co-operation and Development (OECD), through its ‘Principles and Good Practices for Financial Education and Awareness’ advocates that financial education start as early as possible.
“Financial education is a long-term process. Building it into curriculums from an early age allows children to acquire the knowledge and skills to build responsible financial behaviour throughout each stage of their education,” says the OECD.
“This is especially important as parents may be ill-equipped to teach their children about money and levels of financial literacy are generally low around the world.”
On a positive note, however IPEC, along with the Reserve Bank of Zimbabwe (RBZ) – were the national coordinators for the Global Money Week (2021).
Other participating organisations included Old Mutual Insurance, Cell Insurance and Zimnat Insurance, which meant that the local commemorations of the Global Money Week had a skew towards insurance issues.
IPEC public relations manager Mr Lloyd Gumbo said the Global Money Week is only one of the initiatives that they utilise to raise awareness about insurance to children and the youth.
“We participate in the Global Money Week every year in March, targeting children and the youth to sensitise them on financial issues, particularly insurance and pensions. Before Covid-19, we would visit schools and do presentations to pupils.
“However, with Covid-19 disruptions, we now focus more on online activities.
“We leverage digital and social media with content that’s relevant for children and the youth.”
Through this year’s Global Money Week initiatives, about 200 000 children and youth were reached through several digital activities.
But – as put forward by the OECD – financial literacy should be both constant and consistent, which requires it to be implemented from the family unit and at curriculum level in schools.
From another perspective, teaching children about insurance is also vital for the future of the industry.
If, as alluded to earlier, most people discover about insurance in their early-to-mid-twenties, it raises important questions about professionals in the sector; not least, where do they come from?
Because there tends to be very limited awareness of insurance matters amongst children and the youth, very few tend to view jobs in insurance as a career option.
Morgan & Co head of research Mr Batanai Matsika says insurance companies have a strong incentive to ‘catch them young’.
“A look at the insurance sector labour market in Africa reveals that of the total work force, a large percentage are unintentional workers.
“It is also estimated that 40 percent of the workforce in the sector will become eligible for retirement in the next three years,” he said in a recent note.
“There is need for insurance companies in Africa to establish forums for young future leaders to develop and share their expertise and skills.”
Online Reporter