The Efficacy of Long-Term Insurance Model in Addressing Insurance Cover Provision in Zimbabwe

The period 2008 up to the present, has witnessed unprecedented volatility in the insurance industry in Zimbabwe. The significant role that insurance companies play during the aforementioned period, highlight the importance of understanding the state of long term insurance cover within the context of the unstable Zimbabwean economic environment. In order to facilitate an informed understanding of the insurance sector in Zimbabwe, this thesis reviews the efficacy of long term insurance companies in providing insurance cover amidst economic adversity. This study summarizes relevant insights from academic research, and provides related empirical evidence. It is poignant that, the Zimbabwean long term insurance industry has been showing signs of irrelevance to the general population. This study sought to question the relevance and adequacy of the generic long term insurance model in light of the dynamic nature of Zimbabwean social, economic financial and cultural context and, in the process, recommend a model relevant to Zimbabwean circumstances to ensure continued, sound, reliable long term insurance cover that address societal expectations. The generic model is built around three pillars of assumptions namely, Demographic assumptions, Economic assumptions and financial assumptions. In the case of Zimbabwe, recent demographic and economic trends as well as our financial system do not conform to the assumption underlying the Generic Insurance Model leaving policy holders losing value and financial security. The legislative framework has been examined in terms of provision of conducive environment to model insurance along the context of a given constituency have been proved to be completely ineffective in protecting consumers and totally out of touch with modern strategies to protect consumers of insurance and pension services. There is therefore urgent need to remodel the long term insurance along the Zimbabwean cultural context, appropriate with the demographic character, financial limitedness and economic status of Zimbabwe. There is need to restructure the legal framework in line with proper prescribed asset ratios, liberty to invest offshore, realistic capital levels and proper surveillance instruments