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Ipec intensifies oversight amid crises


THE Insurance and Pensions Commission (Ipec) has intensified its supervisory role and co-operation with financial sector regulators to beef up stability in the financial services sector amid growing headwinds.

Ipec commissioner Grace Muradzikwa said at the relaunch of the Zimbabwe Independent 2021 Insurance Survey awards ceremony held virtually last night that the potential impact of crises, like the Covid-19 pandemic, was significant and regulators had to intensify their supervisory roles.

The survey was carried out by the Zimbabwe Independent, the country’s biggest circulating business weekly, in partnership with the National Social Security Authority (Nssa).

The Ipec boss warned that in the absence of solid regulation, even the best firms could collapse.

“The potential impact of crises such as the Covid-19 pandemic on financial stability has highlighted the interconnectedness of markets and reinforced the need for relevant authorities to incorporate a wider array of risks in risk management to enhance financial stability,” the Ipec boss said.

“As the commission, we are enhancing our macro-prudential supervision as well as strengthening co-operation with other financial sector regulators to manage systemic risks that can threaten financial stability. Well managed and regulated entities can fail if we don’t pay attention to systemic risk,” Muradzikwa noted.

She said challenges confronting the insurance sector included negative perceptions emanating from legacy issues as well as reductions in cover, as individual policyholders opt out.

The industry has also been affected by cut-throat competition as the market shrinks in line with economic problems.

Players have switched to offering insurance services on credit, sparking off a growing book of premium debtors.

In addition, there have been limited foreign currency-denominated investment instruments in the domestic market.

Muradzikwa said despite these hurdles, pockets of opportunities had also opened up in the sector.

“The pandemic has exposed protection gaps especially around business interruption, hence creating opportunities for the industry to develop covers that plug this gap, for the future. Whilst navigating the digital revolution, the challenges of cyber risk have been heightened and the need for cyber insurance (has arisen),” she said.

Muradzikwa said players must develop relevant products to meet market demand.

“I, therefore, find the theme for this event, “Thriving in a New Business Environment”, appropriate in that corporates have had to adapt to remain relevant. With the Covid-19 induced restrictions, insurers have had to innovate in terms of products and distribution channels for survival,” she said.

Old Mutual Rest of Africa managing director, Clement Chinaka said it was important for the sector to focus remaining viability.

“It is well documented that Zimbabwe has experienced very difficult economic conditions in the last two decades … suffering a second hyperinflation episode in less than 20 years,” Chinaka said.

“The insurance industry has contracted severely over this period. We need all parties to do all that is necessary for the economy of Zimbabwe to perform at its potential so that the insurance sector works well.

“The Covid-19 pandemic and associated economic difficulties are making affordability of insurance difficult for many people in the short-term,” Chinaka said.

He agreed with Muradzikwa’s call for the introduction of relevant products.

Nssa general manager Arthur Manase said the fund’s partnership with the Independent had been introduced at the right time.

“Nssa is proud to be the official sponsor of this year’s insurance survey, a product of the country’s leading business weekly, the Zimbabwe Independent. The opportunity to collaborate with the Independent in this year’s survey could not have come at a better time for Nssa,” he said.

“Our organisation is in transition as we embark on a transformational journey that is anchored on transparency, honesty and accountability. This journey began in 2020 when we started our rebranding process.”

Manase said Zimbabweans required protection from the ravages of unforeseen circumstances, such as Covid-19.

He said Nssa cannot achieve this alone.

As such, the insurance and pension sector can complement Nssa’s efforts by rolling out solutions that will create a better country, the Nssa boss said.

Alpha Media Holdings chief operations officer Kangai Maukazuva said the Zimbabwe Independent 2021 Insurance Survey virtual event, marked the return of the survey in the digital era.

AMH are publishers of the Independent, NewsDay and The Standard and also operates an online Heart & Soul TV and radio station.

“In 2007, the Zimbabwe Independent and the Insurance Institute of Zimbabwe conceived a partnership that was presented in the form of a printed magazine. At that point, the survey was done without an independent research analyst and there were absolutely no dreams of digital ecosystems,” Maukazuva said

“Today, we have increased the scope, depth, relevance and excellence in the research and adopted the new digital way of doing business; hence the insurance survey results will be delivered virtually.”

Maukazuva pointed out that megatrends in the competitive environment for insurers, reinsurers and the markets were reshaping the sector.

“It is against this background that we have relaunched and conducted this survey. We trust that this survey will continue to achieve its primary goal,” he added.

Independent editor Faith Zaba said the theme of the survey echoed the turbulence that the economy has gone through.

“To the winning companies, I would like to recognise and salute your commitment to the economy. Through this, you have also become inspirational to other corporations as testimony that perseverance, innovation and creativity are the pillars of sustainable business,” Zaba said.

“As the Independent, we will continue to stimulate citizen engagement and debate. We will continue to promote accountability and integrity in all sectors to achieve good governance.”

  • Read Muradzikwa’s full speech on A7.

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