The Zimbabwean Insurance and Pensions Commission (IPC) is urging local insurance companies to make use of the ever-growing blockchain technology.
Most industries are facing problems that can be solved by the blockchain technology. According to IPC, the technology will offer several advantages to the sectors. Some of the benefits are that the technology will make it easier for the companies to deal with the issues of low insurance and pensions penetration.
IPC’s chairlady Mrs. Lynn Mukonoweshuro suggests that financial inclusion and insurance penetration cannot be achieved using the available methods of insurance delivery as they mostly rely on agents and intermediaries. The blockchain technology will allow the insurance companies to develop tailor-made products that will serve the digital customers.
Adopting the blockchain technology will also be a better way of attaining universal access to insurance and pensions by harnessing the power of this technology. The Zimbabwean Insurance industry is also considering adopting this technology since several insurance organizations in the world already make use of it in quantifying and managing risks thereby improving underwriting and adjustments of claims made by clients.
Also, the chairman also argues that the technology can provide a modern update in the methods of delivering insurance that rely mostly on agents and brokers since most brokers and mediators are the main causes of failures witnessed in the insurance sector. Of significant importance is the fact that the blockchain technology will be able to service the digital customers, who are the most targeted people in the insurance industry.
Mrs. Mukonoweshuro also calls for the insurance industry to embrace blockchain and use it in reaching out to a large and wider population in Zimbabwe who are willing to venture into the insurance industry. These technologies are vital in providing new ways of measuring, controlling, and price risking. Additionally, blockchain will make it easier for the insurance companies to engage with their customers and clients, hence allowing them to reduce their costs and expand insurability.
The stakeholders in the insurance industry understand that the industry must evolve for it to stay more competitive. This entails streamlining the processes involved as well as meeting the demand of all the savvy customers. The technology hence allows insurance companies to overcome the challenges thereby creating transparency in operations that are based on trust and stability.
Below are some of the challenges faced by the insurance industries in Zimbabwe and the world at large, and how blockchain can mitigate the problems.
The common challenges experienced include limited growth in markets, poor and fraudulent claim activity, and handling of large amounts of data. The blockchain technology will allow insurers to sift through the important data when delivering tailor-made services and products. The visibility in data will make it easier for the industry to be more transparent and corruption free.
Several Zimbabwean insurance companies like Marsh already have adopted blockchain for purposes of proof of insurance. Marsh thinks that the process of storing and issuing insurance certificates can be transparent and well streamlined with the help of blockchain technology.
Nevertheless, for the blockchain to be fully effective, Zimbabwean industries require huge funding from their governments.