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‘Insurance not priority for most Zimbabweans’

Pambwe (TP) made the revelations on the platform In Conversation with Trevor hosted by Alpha Media Holdings chairman Trevor Ncube (TN).

SATIB Insurance Brokers general manager Taurai Pambwe says insurance is not a priority for most Zimbabweans as shown by the market penetration of less than 2%.

Pambwe (TP) made the revelations on the platform In Conversation with Trevor hosted by Alpha Media Holdings chairman Trevor Ncube (TN).

Below are excerpts from the interview

TN: Taurai Pambwe, welcome to In Conversation with Trevor.

TP: Thank you, thank you Trevor. My pleasure being here.

TN: Pambwe is a very unusual name. I looked at it and I tried to Google it and so forth. Talk to me about that name Pambwe.

TP: Oh yeah, very interesting Trevor. So we come from Manikaland, Nyanga, in an area called Nyatate.

And the word Pambwe came from, it was a nickname for our clan. And it was initially called Mapambwe, which means what has provoked you.

And my grandfather then decided to take the Pambwe part and then pass it on as a second name to his kids.

 So interestingly, we come from a bigger clan called Vere. So if you get to Nyatate, you see all the Veres around.

And if you google Vere, you see a lot of them. But when it comes to the Pambwe, it's coming from my father, who is the first born in the family, and then all his siblings, and it goes on and on like that.

Interestingly, when he passed away, my grandfather, his children could not even take him from the mortuary because his surname and their surname were different.

So it's a very interesting scenario that we find ourselves and the name in.

TN: And who had provoked him?

TP: So there are a lot of things that were happening back then. It then spans back to his father as well, who is granddad to us.

And a lot of things that happened back then from family wrangles and people moving from one area to another.

And the grandfather thought that people surrounding him perhaps would be bothering him. And as a result, that nickname then, that word started being rumbled around.

And bearing in mind as well that in Nyatate, Manikala, and Nyanga, we border Mozambique.

So there's a lot of ways that would work this side of Zimbabwe and also across. So as a result of that, it then attached to him.

And then from there, it then cascaded to his sibling, to his children. And then  one of his children who happens to be my grandfather, then decided to take it as the second name. 

TN: You are, like we say, the general manager of SATIB Insurance Brokers. What does SATIB mean again? And you've been general manager since 2020. Right?

TP: So SATIB Insurance Brokers is an abbreviation of a regional company. It stands for Safari and Tourism Insurance Brokers.

So it spans back to 1990 when a family in South Africa decided to provide solutions for game, which then also went into the tourism side of the space.

And as a result of that, they provided a niche, they found a niche market, and looked for cover to move the game from one point to another.

 And then it grew as a household name in South Africa. And then they decided, and they realiSed that in a static region, there's still that opportunity.

So they then spun into Zimbabwe, Mauritius and Botswana. So it's originally a South African company. Precisely.

TN: Fascinating. And you are now in the region, which countries are you in?

 TP: So in the region, we have Botswana, we do have Zambia, Namibia, Mauritius, and Seychelles.

TN: And talk to me about it, because I get the sense that this is a specialist insurance brokerage. Talk to me about the services that you provide.

TP: So the gap which was in the market, I'll narrow it down to Zimbabwe, was very simple.

When people who are frequenting, for example, Victoria Falls want to come over, they look at this, the liability aspect.

If they are in Africa, if something happens to them, are they able to get quick assistance?

And is the hotelier space also able to meet the liabilities that come from them interacting with these foreigners when they are coming as tourists around?

And most of the people that were frequenting that area are from litigious countries, US, Canada, and the liabilities that they are used in their country is in excess of millions.

So to get that cover locally of one million, for example, to say it's a public liability policy to cater for your guests if they come and they're injured, was a mammoth task for the local market.

So the solution was then to look for risk carriers, where they are coming from, who speak the same language, and then we then facilitated the whole transaction to the lawyers in the market.

So when they then realised that they started offering what we are used to, then it becomes a marketing opportunity also for the hotelier space.

And as a result of that, those policies were hot cakes in Victoria Falls and anyone who's in the tourism and safari space. So as we speak, we do control a chunk, 60% in that region.

So it started as an agent in Zimbabwe in 2008, and then in 2010, a brokerage company was then set up.

Then the Harare office then opened in 2013, trying to diversify away from the safari and tourism, and then look at the general side of things.

So the Harare side, which is the Harare office, started in 2013, and I then joined them in 2015.

 TN: Tell me about that. are a brokerage firm, so you sit somewhere.

 Talk to me about that. Who sits this side and who sits that side, just as briefly as possible to help us understand what the insurance lie of the land looks like?

TP: So the landscape from insurance, it starts from the person who wants insurance. But in between the insurer, there is room for a broker.

A broker works like your lawyer, if you take it from a legal perspective. You have a person who has got a case at the court, and they want representation at the court.

You are that representation. And we are basically the lawyers when it comes to insurance.

And then behind the insurance company, they also have an insurance broker, because the insurance company wants to have capacity to write more business.

But you can't use your own shareholders' capital to write the risk. You then spread your risk by use of reinsurance. So reinsurance happens to be the insurance of insurance companies.

 And then we also have those in our landscape. And putting numbers into perspective, we have 27 insurance brokers. We do have 20 insurance companies.

 So it's that aspect of pulling resources together and spreading the risk.

Then they go beyond the borders, the reinsurance guys. And then that's when you start seeing them placing business in all of Africa, in the land and market, in Asia.

 And when it comes to that level, it's then called retrocession years.

 TN: Wow. So that's the landscape. You also do political violence and terrorism. Talk to me about that. I found that interesting.  Why that space, and how do you do it?

 TP: We try to look for a gap, close the gap. So we then started analysing what was happening in the Sadc region.

 We had cases in South Africa of uprisings. We have cases in Malawi, we have cases in Zambia, and then also had cases in Mozambique.

 And then Zimbabwe, there were also have cases of people protesting.

 And as a result of that, it then changed the narrative of the Sadc region, where it became a hot potato for political violence.

So as a result of that, we then went outside to check on partners. And we then realised that there is room to provide cover, because ordinarily, these things are not covered by insurance.

 And in 2019, there were some protests in Zimbabwe, January, where people protested against the fuel, increasing fuel prices, which then resulted in certain retail shops being attacked and also ransacked, goods were stolen or taken.

And those policies which we had, we managed to test the pudding.

 TP:  You paid out?

 TP: We paid out, and I presided over one case, which was in excess of half a million, and it was paid. And each time I passed through that branch, I said, it's our insurance money which kept them going.

 TN: Kept them going. But they were paying you, what do you call them? Their premiums?

TP: When it comes to paying, insurance people basically don't want to pay. You have to justify why they have to pay you for what you've gone through.

 This has changed. The long and short of it, Trevor, you need a broker. The reason why I say that is because insurance is a contract.

And it's not everyone who does understand the terms and conditions. And also underpinning insurance business is the need to make profit.

 It's a business. So they put conditions to say you will only pay in the event of, which we call insured periods. So sometimes you come and say, guys, I want more insurance.

TN:  Tell me, how big is the terrorism and violence component of what you do? Is that a big percentage of the work you do?

TP: It's a cyclical type of business. Usually people take that on board two years just before elections.  So it's a cyclical type of business.

 Then we have some who then take it continuously.

 Because also the advanced market has seen that there is a high appetite for the product when there is the actual risk.

So they tend to differentiate the pricing of someone who has been a lawyer over the years with the one who is coming on board.

TN: Tell me, Taurai, how much of the Zimbabwean market is insured? What percentage are we talking about here?

 TP: Very interesting. Market penetration is less than 2%, which then means insurance is not really up there in the priority list of most Zimbabweans.

To attest to that, the premiums that are retained in this market is around US$235 million only.

If you go down south, the insurance market is US$8.1 billion.

And one insurer, Santam, which is number one in South Africa, they write in excess of US2 billion premiums in a year.

 TN: Why is market penetration so low in Zimbabwe? What explains that?

 TP: So there are a lot of factors that do affect insurance.

And unfortunately, for the past 20 or so years in Zimbabwe, the insurance market was on the receiving end simply because insurance, just like the begging sector, is only as good as your economic activity.

 So if the market fundamentals or the economy is oiled and running like your advanced economies, you realise that also insurance picks up simply because there is disposable income.

 People can plan around their money.

People are also, I would say, they have assets to insure.

 And so those things do affect, have affected us. Then you have the 2008 issue, which then also still cling in your head and everyone else about insurance.

Though a lot of work is being done to try to rectify, compensate whoever was short changed then, but it leaves a sour taste in the mind of a lot of people.

TN: Explain to people what you mean by what happened in 2008, just for the benefit of people out there. Sure.

TP: So we, inflation, was doing what it knows best, right? That was in 2008, 2009, just before dollarisation. And as a result of that, the life side of things. So insurance, we have two arms.

 We have the short term, which the one I specialise in, that's property.

They also have the life insurance side. So for example, in life insurance, all the savings that people had done were washed away.

 And as a result of that, people were then feeling robbed. But what's robbed is the issue of what I would say, the currency aspect, right?

So it then affected a lot of people when it comes to insurance or saving in Zimbabwe.

And the need for people to cling to their little resources as opposed to transferring the risk to the next person.

 They refused. So that's what happened in 2008.

TN: What number are we talking about of what people feel they were shortchanged?

TP: But what I can tell you is at a personal level, someone was contributing a hefty amount of premiums from a life perspective, hoping that when they do retire, they get a sizable pension from their own savings through insurance.

Right now, people are getting US$50 or less, right? And that is short changing the mind of someone who has been putting more than US$50 a month to pay the premiums for.

 TN: You've compared us to Malawi, to South Africa rather. How do we compare? Do you have the stats for Malawi and Zambia, for instance?

TP: Not necessarily.

Suffice to say that in those countries that we've mentioned, including South Africa, you realise that the top insurers are being headed by Zimbabweans. For example, Santam, the group CEO, is a Zimbabwean.

 You go to Mozambique, the top players there, it's the Zimbabweans that are doing the show.

So when it comes to knowing what needs to be done, Zimbabweans, they do know what needs to be done from an insurance perspective. But once the macroeconomic fundamentals are in place, there is room for us to redeem the industry, vindicate the industry, and then we pick it up from there.

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