Funeral assurers review premiums
FUNERAL assurers said its members have begun reviewing premiums which had been deferred due to increased number of companies and individuals who have stopped contributing due to disruption of normal business operations by the coronavirus (Covid-19) pandemic.
Speaking during a virtual insurance and pensions mentorship programme at the weekend, Zimbabwe Association of Funeral Assurers (Zafa) general manager Taka Svosve said the “abrupt stop” to most business transactions when the lockdown was introduced in the country resulted in some companies and individuals failing to generate income, thus deferring any premium reviews.
“It, therefore, became 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.
He said while premiums were being eroded by rising inflation, it was not easy for funeral assurers to review their premiums during the pick of the lockdown.
“Companies are now reviewing (premiums) gradually, but cognisant of the fact that incomes are constrained…Both group and individual clients had their incomes curtailed due to the Covid-19-induced lockdown and could, therefore, not meet any new premiums increases.
“Funeral assurers had no option, but to defer any premium review to the detriment of their cash flows and operational obligations,” Svosve said.
Svosve indicated that despite the premium freeze against rising inflation, a premium review was inevitable going forward in order to preserve the value of funeral policies as well as to maintain the standard and quality of services provided.
Just like any other sector of the economy, the funeral industry is suffering or has suffered its own share of this Covid-19-induced lockdown.
“Funeral assurers rely on visiting and meeting with potential clients for new business.
“However, with most companies on Covid-19-induced lockdown coupled with restricted movement for both human and vehicular traffic acquiring new business became a challenge.”
“When incomes of both individuals and corporates are suddenly cut as happened/happening during this Covid-19 pandemic naturally, getting new business for funeral assurances is affected. Funeral insurance is pushed to the bottom of the priority list under the circumstances,” said Svosve.
He said while funeral assurers have fully met and were fully meeting all claims, including those of Covid- 9 victims, the number of fatalities from the pandemic had not resulted in unusual claims for services from funeral assurers.
“However in the event of a sudden increase in infections and subsequent deaths from Covid-19 (in case it happens), there is a possibility of a run on claims on funeral assurers,” said Svosve.