MUTARE- Premium collections in the funeral assurance sector plunged during the Covid 19 period resulting in financial shocks for the sector, officials have said.
Zimbabwe Association of Funeral Assurers (ZAFA) say during initial 21 days of the national lockdown, transactions virtually stopped, as individuals and companies stopped generating income, sending the sector in a tailspin.
ZAFA general manager Taka Svosve told journalists during a virtual workshop organized by the Insurance and Pensions Commission (IPEC) that the sector is groaning under negative financial shocks, reduced premium contribution and general constriction of business space.
Svosve said while most companies including banks were closed, stagnating financial transactions flows including payments, the assurers were required to bear extra sanitary requirements. All frontline workers were also required to get tested which came at a cost to the funeral assurers.
"Funeral assurers also met some unbudgeted costs, some of the requirements due to Covid were specialised and the increased costs were unbudgeted for and therefore an intruder in the cash flow of the funeral insurer.
"It was also difficult for funeral assurers to receive or follow up on their premiums from both individual and group clients resulting in some unexpected shocks in cash flows," he said.
Svosve said funeral assures had no option but to defer any premium review but to the detriment of their cash flows and operational obligations.
He said due to the challenge in the macroeconomy the funeral insurance is pushed to the bottom of the priority list under such circumstances.
"When incomes of both individuals and corporates are suddenly cut as happened during this Covid19 pandemic naturally getting new business for funeral assures gets immediately affected.
"Funeral insurance is pushed to the bottom of the priority list under the circumstances," he said.
The ZAFA manager said the logistical challenges also presented opportunities for innovation a challenge the sector is geared for.
"Yes we were affected by the Covid 19 pandemic but in terms of opportunities, it means we have to review our structure and use innovation. These are opportunities and we are going to explore them as we move on," said Svosve.
ZAFA is the umbrella body of funeral insurers and services in Zimbabwe for the purpose of pursuing common business interests, lobbying on regulation, registered under IPEC.
COVID-19Zimbabwe Association of Funeral Assurers (ZAFA)