Short-term insurance growth still slow
The local short-term insurance industry has had very little growth this year and access to short term insurance services still remain low for the greater portion of the population. According to Namfisa Financial Analyst Colestina Nakaziko there are no short term insurance companies that have been registered this year.
Nakaziko said the growth of short term insurance companies in the country faces many challenges and is therefore growing at a very slow pace. Amongst the challenges is the lack of well-developed distribution channels, the lack of awareness and education on short term insurance to the public. She also said the current financial model does not make provision for low income groups.
Namfisa intends to strengthen its regulatory grip over the industry, to address the situation the regulator has come up with different strategies that will help increase growth in the short term insurance company industry. “The introduction of micro-insurance in the future will make room for more insurance companies to register in Namibia. We are currently running consumer education programs to inform consumers about financial services, and we are busy with the last stages of drafting the FIM Bill which will accommodate the new developments in the industry and provide an efficient and effective regulatory and supervisory framework,” said Nakaziko.
Adding that another major concern for both the regulator and the industry is the use of unregistered agents and brokers. She said that this is caused by a lack of well-developed distribution channels, a lack of experience and expertise in the short-term industry. Climate change is also another factor as it creates uncertainty in the industry, and unfair competitions or premiums that leave the country through fronting are also a concern.