The Insurers Association of Zambia has revealed that only 2.8 percent of adult Zambians are insured.
Association Executive Director Christabel Banda explained that cultural issues coupled with the lack of awareness are some of the key factors behind the low insurance penetration in Zambia.
He said research has shown that about 42 percent of adult Zambia have no idea what insurance is while 11.2 percent do not know where to get it and another 5.2 percent do not know the benefits and 14.5 percent said could not afford to pay insurance premiums.
Mrs Banda however observed that uptake of insurance product goes to 20 percent with knowledge.
She was speaking on Thursday during the Zambia Institute of Chartered Accountants organised Accountants Forum on the topic “Is the Insurance Industry in Zambia-adding value or a rip-off?”
Mrs Banda said in 2015, insurers paid a total of K735 million in claims with claims paid by life insurance companies standing at K333 million while General insurance companies paid claims totalling K402 million.
She said the total loan book held by banks was K25 billion.
Mrs Banda also highlighted that some large claims paid in 2016 include K33 million for damages and loss of business to a mine and K10 million fire claim at one of telecom companies whose cables were burnt.
She also revealed that K7 million was also paid out after an expatriate mine worker had a fatal accident and K4 million was also paid out after a Fire claim for a Sawmill and a 2 million fire claim paid to one of the lodges after it was gutted.
Mrs Banda observed that there are some common misconceptions that Insurers in Zambia do not want to pay claims and that they do not have the capacity to pay big claims.
“There are a number of common misconceptions in Zambia like that if there is no claim the premium is simply profit or the terms and conditions are there to prevent payment of claims while others say that they will only pay premiums when they have a claim. Others say insurance is unnecessary,” she said.
Mrs Banda said the culture of out of pocket payments for risks that can be insured needs to stop so that the nation can utilise resources more productively for the development of the country.