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Lovemore Zigara Midlands Correspondent
ONLY five percent of the country’s 13 million people have funeral cover, according to the Zimbabwe Association of Funeral Assurers (Zafa), a grouping of all assurance companies in the country.

Speaking on the sidelines of the organisation’s inaugural conference, which ends today in Gweru, Zafa president, Edward Gomba, blamed the situation on lack of disposable incomes.

“We’ve between three and five percent of the population who’ve funeral assurance policies, which means our penetration rate has to slightly increase.

“The challenge we’re having is mostly to do with the economic challenges being experienced,” said Gomba.

He said while a majority wanted funeral policies, they could not afford as they do not have regular income.

The percentage figure excludes family and community burial societies where a majority belong.

Gomba said those who may buy the policies often failed to pay the premiums.

He called on the government to waive duty for funeral assurance companies when they import vehicles and other equipment.

“Our members need equipment in the form of motor vehicles, buses, cold rooms and other burial equipment, which they’re finding difficult to bring in the country due to high import duty.

“We’ll therefore be very grateful if duty is waived or reduced when we import hearses and other burial equipment not only for the benefit of funeral companies but the society at large,” said Gomba.

“If we’re properly equipped as funeral industry we’ll be better positioned to freely assist the government in burying people in times of national disasters.”

In his keynote address, the head of prudential supervision with the Insurance and Pensions Commission (IPEC), Pupurai Togarepi, expressed concern that some new products were being launched onto the market without regulatory approval while some policy terms and conditions were in violation of insurance laws and regulations.

“The number and frequency of new funeral product proposals is on the upward trend. However, the commission has noted with concern that some new products are being launched onto the market without regulatory approval. At times, premium rates would have been arrived at without actuarial input,” said Togarepi.

“In some instances the policy terms and conditions are in violation of the governing insurance laws and regulations. For example, policies for which premiums have been paid for more than five years are not given paid up status as per dictates of the regulatory requirements, and this is resulting in unfair practices not expected of a professional organisation.”

Togarepi called on Zafa members to align their activities with the governing laws, regulations and the industry code of conduct.

The inaugural conference runs under the theme: “Raising the standard for economic and social transformation”.

Meanwhile, players in the industry have been called to review capitalisation requirements in the sector, which would allow new and small-to-medium players to participate in the sector.

About $1,5 million is needed in capital requirements in the life assurance sector, which has made it difficult for small-to-medium players to enter the industries.

Despite the low penetration rate, the sector has seen an increase in business.

The funeral assurance sector has recorded an 18 percent increase from $8, 8 million as at 31 March last year to $9,1 million during the same period this year.

The Micro Insurance Bill has been tabled before Parliament in a move aimed at addressing challenges in the sector.