Published: 30 May 2014

Zimbabwe's insurance industry could be sitting on $1 billion worth of premiums which can only be unlocked by increasing the insurance penetration rate from the current 3,65 percent.

First Mutual Holdings Limited group chief executive Douglas Hoto said this at the ongoing Imara Investment conference.

"In 1996, Zimbabwe's penetration rate was at 6 percent of the GDP but because of the different challenges we met during the hyper-inflationary era and post dollarization, we are now at 3,65 percent. If we double the penetration rate to 6 percent of GDP we could be sitting on $1 billion in premiums," he said.

According to the Insurance and Pension Commission the penetration rate could reach 20 percent in the next three years.

Hoto said insurers should harness social media and technology to reach the untapped lower end of the market and increase penetration.

He said the scope of FML's penetration growth was anchored in low income groups using low value premiums.

"Technology will drive penetration ratios. If you are going to use low income premiums to drive growth, you need to make sure you are using technologies that make it cheaper than the higher income premiums, the cost has to be next to none," he said.

He added that FML was currently seeking technical partners who would provide the systems and technology required to make low income premiums viable.
- BH24

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