B8 ADVERTISING SUPPLEMENT TO THE ZIMBABWE INDEPENDENTJANUARY
29 TO FEBRUARY 4, 2016
INSURANCE
Why buy motor comprehensive insurance NYARADZAI TASARANAWO
IN Zimbabwe, like most other countries, it is a legal requirement, hence mandatory, that all vehicle owners take out motor third party insurance before vehicle registration and licensing. This is a testament to the regulatory authority’s seriousness about protecting the general public as motor third party insurance ensures that, in the event of an accident, a vehicle owner will be able to compensate third parties involved. Motor third party covers the vehicle owner against any financial liability arising as a result of death, physical injury or damage to the property of a third party in any accident. In-light of the current liquidity and economic challenges, vehicle owners are tempted to purchase the barest minimum cover which enables them to comply with legal requirements. This is despite there being two other types of motor insurance policies available, which provide more extensive cover namely motor comprehensive and motor third party fire and theft. Locally, third party cover on average costs three times less than full comprehensive cover.
This makes motor third party more attractive for motorists. However, the major drawback with third party insurance is that the policyholder cannot make claims for damage to their own cars or claim compensation for injuries to passengers unless the accident can be proved to be someone else’s fault. Unlike motor third party insurance, comprehensive cover protects the insured’s own property against accidental damage in addition to third party liability. Hence with comprehensive cover, policyholders can claim from their insurer for accidents that are their fault and even those whose fault can not be proven. Comprehensive insurance covers, the expensive repairs in the event of a loss including provision of money which enables replacement of car in the event of a total loss. As with global insurance markets, the local motor insurance sector, is highly competitive and as such, insurers try to differentiate their product offering through extras which include provision of a courtesy car when insured vehicle is under repairs. Breakdown cover and towing may also be included as part of the comprehensive cover to enhance policy
attractiveness. The liability cover under comprehensive cover is usually greater than that offered under third party. For instance under the standard third party , bodily injury is covered up to a maximum of US$2 000 whilst property damage is covered up to a limit of US$3 000 whereas under comprehensive cover both limits are around to US$10 000. Third party, fire and Theft (TPFT) cover exists for the benefit of motorists who require some level of cover for their personal cars at the same time also need more affordable cover compared to comprehensive. Opting for lower level for car insurance than comprehensive cover is a clear false savings strategy. Though comprehensive cover is certainly more expensive than motor third party, the higher cost of cover is commensurate with the associated benefits. Comprehensive cover safeguards the policyholder’s asset as opposed to third party cover which protects against financial obligations to parties wronged by the insured owing to accidents. Motor comprehensive cover is the most complete type of cover available to motorists and hence offers a greater level of peace of mind.
Professionals in the insurance services sector MOST individuals restrict their interaction with the insurance services sector to the purchase of insurance and when necessary, claiming for compensation. Rarely do they consider that the insurance sector can also service them through provision of employment opportunities. Though professions in the insurance sector are not as revered as medicine and accountancy, they can be equally satisfying. The sector offers diverse occupations in risk underwriting, accounting, broking, marketing, surveying, investigation, actuarial science, risk management and investments management. However, some jobs such as claim adjusters, actuaries and insurance underwriters are unique to the insurance sector. Different skills sets maybe required depending on the job specification. Analytical and technical skills are a prerequisite for most of the jobs unique to the insurance sector. To demonstrate technical skills, individuals must be licenced by passing examinations administered through accredited professional bodies. Locally to obtain an entry level job as a sales agent, one must have passed the Certificate of Proficiency in Insurance (COP) administered by the Insurance Institute of Zimbabwe. Typically to acquire a position as a senior underwriter or senior claims processor on must possess at least a diploma in insurance. Locally the Insurance Institute of Zimbabwe offers the Diploma in Insurance and other related insurance qualifications. Internationally, the Chartered Insurance Institute (CII) a UK based professional organisation provides accreditation and professional qualifications tailored for the insurance sector. In Zimbabwe only two universities, The National University of Science and Technology (NUST) and the Midlands State University (MSU) offer undergraduate and post graduate studies in insurance. In addition to technical acumen, Interpersonal, negotiation as well as entrepreneurial skills are also important as insurance professionals are required to communicate with audiences of all types ranging from potential policyholders to regulators. People skills are more important for sales agents. Underwriting, Risk Management and Actuaries are some of the key professions in the insurance sector. These three disciplines are identified as professions as they provide expert services acquired through specialist training and usually requires the professionals to be affiliated to a professional body. Through these bodies the individual professionals are required to adhere to Continuous professional development schemes. This ensures the professionals continue to be competent and relevant in a rapidly changing business environment.
Insurance Underwriter
An underwriter is a professional who assesses risks that policyholders want insured and decides the premiums, and the terms and conditions under which they can be accepted by the insurer. They are also responsible for dealing with insurance brokers and clients as well as responsible for placing and negotiating for reinsurance. Strong analytical skills are required to be an underwriter as the job requires a high level of judgement.
Risk Managers
Risk managers identify and analyses and manage potential areas of risk to a company’s earning capacity and business continuity. Risk managers in conjunction with actuaries may make use of complex mathematical and statistical models to analyse risk affecting insurance companies. To be successful in this role good interpersonal skills and technical knowledge on insurance operations is essential. Furthermore a creative mind capable to perceive some future risk trends is needed. The Financial Risk Managers (FRM) qualification was introduced aimed specifically at enhancing the technical expertise of risk management professionals.
Actuary
Actuaries are involved in quantifying the risks involved in insuring an individual or company’s property. Clearly there are many employment choices in insurance, one just needs to equip themselves with the right education and skills to be competitive. Aside from the monetary compensation, insurance professionals derive satisfaction in assisting individuals safeguard themselves and their property against financial losses arising from adverse events.