CREATION of an enabling environment through appropriate legislative framework remains one of the key components of the Zambia micro-insurance strategy, Pensions and Insurance Authority (PIA) registrar Martin Libinga notes.
Mr Libinga said PIA has since developed micro-insurance regulations which protect low-income people against specific risks in exchange for regular monetary payments (premiums) proportionate to the likelihood and cost of the risk involved.
During the Microinsurance Business Models for Africa Conference held in Livingstone from March 9-12, 2015, Mr Libinga said, “These [regulations] were subjected to extensive stakeholder review and it is our hope that they can quickly be promulgated.
“I have no doubt that these will provide a framework for the industry to introduce innovative products that will cater for the needs of the targeted customers, that is, the low income market.”
Within the framework of the current legislation, the PIA is still supporting insurance companies that have developed products tailored for the low-income market despite not having specific legislation on micro-insurance.
In highlighted the importance of consumer protection and consumer financial education in financial supervision, Mr Libinga said, “I cannot overemphasise [this significance], and these have been high on the agenda of regulatory forums.
“It is thus, cardinal to ensure that as we develop business models and legislative frameworks, creating value for the micro-insurance targeted markets should not be ignored. Consumer financial education is also a critical ingredient, particularly in micro-insurance, because no matter how well designed the products can be, they have to be understood by the target market, to achieve inclusiveness.”
Officiating at the function, Felix Nkulukusa who was then, Ministry of Finance Permanent Secretary said the theme of the conference -Microinsurance Business Models for Africa’ was important as most of African countries had very low levels of insurance penetration.
“We have heard of a number of cases where our people have gone into desolation after disaster has struck. Children are left without parents and no means to live a decent livelihood or continue their education. Households are left with nothing after a theft or fire. Micro entrepreneurs close shop after their goods have been stolen or burnt. Small scale farmers are left in misery after a drought or flood,” Mr Nkulukusa said.
Certainly, there is no need to emphasis on the importance of insurance, “but, I would like to commend you for your investments in coming to this conference that is discussing not just ‘insurance’ but ‘microinsurance’- insurance services for the low-income market segment,” he said.
Government is fully aware of the challenges that the market segment has in understanding insurance and indeed making the decision to buy a ‘peace of mind’ amidst the many competing needs for their income – Conventional insurance would certainly fail to reach this target market.
Certainly, Government is supportive of initiatives that could help Zambians manage their risks better.
“The Zambian government is keen to work with the private sector to bring development to the country even through the insurance sector. The government of Zambia is in the process of enacting a new Insurance Act which will spur the insurance industry to higher heights,” said Mr Nkulukusa.
The conference was attended by 84 participants from 13 African countries and also delegates from the USA, Germany and Switzerland.
The discussions of the conference were centered on putting clients’ first, business case and challenges in micro-insurance, health insurance, agriculture insurance and consumer education and marketing.
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