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.
Insurance in Zambia has an appearance of a scam; the insurance claim process takes forever, and people waiting on automobile insurance claims have to travel by public transport during the claim process and NO rental car is provided.
And if you think this is not discouraging enough, think again!
Zambians need a cultural shift to see the value in life insurance, trust funds, etc.
With the high levels of poverty and lower life expectancy under pf who is dull enough to spend money on insurance. Money they will never see kikiki you think a hungry man will spend on insurance
NEZ: To the contrary that is when you need insurance. When you are tired and can’t campaign any more you will fall on this insurance premium to survive. You are misleading yourself
Comment: 1. Insurance companies should consider providing alternative means of transport for the affected client e.g when ones vehicle is grounded and the matter is still being handled by the insurance company. 2. the process of handling of claims should be expedited e.g claims should be concluded within a maximum period of two weeks. 3. Insurance premiums should be reduced as they are way too high for the majority Zambians. 4. Put a mechanism whereby insurance premiums are paid on reducing balance method from one year to the next but the insured value remains the same.
Comment:hello ba samson, premiums reduce as you renew your motor vehicle insurance. Thats what happens at Zsic. Then over some claims it may not be possible to clear it off in two weeks for some cases.. due to some investigations and court processes. you know paying claims means there are accidents which may involve death and until such issues are conclusive.
Politics of Zambia does not motivate the public to insure. GRZ, political parties, PF, UPND, FDD, churches, etc have falsely taken over the roles of insurance companies. These entities tell the public that you are poor & promise them that they will meet whatever misfortune that comes. Leadership lacks from these leaders to motivate the public to insure rather than politicking. For sure wherever there is storm damaging buildings, funerals, livestock diseases breakout, etc they will be the first ones to arrive & promise compensation, which they will not fulfill. The public has lost confidence in insurance just as they have lost it in Police, hospitals, football because insurance companies do not pay or delay to pay claims. The reason is low premiums which don’t allow them to collect enough…
The reason is low premiums which don’t allow them to collect enough to meet expected liabilities. I have heard of preachings from ministers that fuel, electricity, telephone tariffs, interest rates in Zambia are the lowest in the region but not insurance premiums. The concern as to why insurance companies fail to pay claims ends up at Insurers Association of Zambia level & doesn’t reach Minister of Finance or President. For Britons & others to appreciate insurance it took the sole effort of WINSTON CHURCHIL, then Prime Minister.
“If I had my way, I would write the word “insure” upon the door of every cottage and upon the blotting book of every public man, because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes which would otherwise smash them up forever.”
The reason is low premiums which don’t allow them to collect enough to meet expected liabilities. I have heard of preachings from ministers that fuel, electricity, telephone tariffs, interest rates in Zambia are the lowest in the region but not insurance premiums. The concern as to why insurance companies fail to pay claims ends up at Insurers Association of Zambia level & doesn’t reach Minister of Finance or President. For Britons & others to appreciate insurance it took the sole effort of WINSTON CHURCHIL, then Prime Minister. “If I had my way, I would write the word “insure” upon the door of every cottage and upon the blotting book of every public man, because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes which would otherwise…