MORE than two million insurance policies lapsed during the first quarter of this year,
with regular premium reviews and change in policies making it difficult for policy
holders in the face of harsh economic challenges, it has been learnt.
According to the life assurance industry report, the sector had a total of 2,1 million
lapsable policies translating to 11 percent, an increase from 8 percent recorded
during the same period last year.
“At the beginning of the first quarter of 2023, the sector had a total of 2.1 million
lapsable policies, of which 215,146 policies lapsed during the same quarter,
translating to a lapse ratio of about 11 percent. The lapse ratio of 11 percent is
greater than the lapse ratio of 8 percent recorded during the same period in 2022.”
“The increase in lapse rate indicates that more policyholders are failing to maintain
their policies and lack of confidence in the sector, a situation that is linked to
economic hardships and volatility in the market, whereby policy holders are finding it
hard to continue with their premiums in the face of regular reviews and change in
policies.”
Meanwhile, the sector recorded 97 700 not taken up policies with a nominal gross
premium of $230,6 million.
Some of the companies with NTUs include Zimnat Life with 1,556 number of policies
with a nominal gross premium of $10 065, Old Mutual Life had 225 number of
policies with a nominal gross premium of $1 414, Doves Life 6,014 policies, Fidelity
Life with 385 policies at $12,414, Econet Life with 89,403 policies at $205,627 and
First Mutual Life with 117 policies at $ 1,095
“For the quarter ended March 3, 12023, the Life Assurance Sector reported a total of
97,700 not taken up (NTU) policies, with a total nominal gross premium of $230.6
million.
“NTU policies refer to insurance policies that have been offered to potential
customers but were not taken up.
“This can happen for various reasons, such as policy not meeting the customer’s
needs or budget, lack of understanding about the policy, or the customer already
having similar coverage from another provider,” reads part of the report.
Insurance plays a fundamental role in economic development by enabling and
driving economic activity by protecting lives and property against insurable risks.
Insurance companies act as a buffer against adverse events and as the invisible
glue of society.
Risks such as Covid-19 or climate change may arise on the horizon of economic and
social progress, causing increased vulnerability throughout the world, but with a
greater impact on countries whose economies are still emerging.
Given the current environment people continue seeing that insurance penetration
remains very low in many markets that could benefit the most from the peace of
mind it brings.
In life experiences, an infinite number of situations that are unforeseen that can
affect human well-being and that of families.
Such is where insurance begins to play an important role, since it allows users to
eliminate the effect of these unforeseen events or reduce their impact.
