The survey conducted under the Zimbabwe Integrated Capital and Risk Project (Zicarp), spearhead by the Insurance and Pension Commission (Ipec), seeks to bring about transition from capital threshold compliance to a more integrated framework that looks at credit, strategic, operational and insurance risks associated with Insurance companies.
The new framework is expected to improve the regulator's oversight of the industry will focus on compliance based on risks associated with insurance firms.
"At least 62% do not have a software for analysing risks in their business. There is need for investment in technology resources in order to ensure adequate preparedness in the new regulatory regime," said African Actuarial Consultants researcher, Tinashe Mashoko.
Mashoko was presenting preliminary results for the Zicarp study undertaken on local short term, life, funeral and reinsurance firms.
Zicarp was launched in March this year by Ipec and contracted African Actuarial Consultants to carry out a broad-based study among local insurance firms.
According to Mashoko, the study discovered that insurance firms board members were willing to embrace Enterprise Risk Management and cooperate with Zicarp when it comes in place.
While 96% of insurance staff members considered risks in their day to day operations, the study revealed that more training was required to capacitate employees.
"Sixty percent of insurance firms said they hold training, but the positive risk culture needs to be underpinned by regular training, not only at board level, but across all members.
Forty percent of firms who do not undertake regular training is too much a number. All organisations will need to invest in training to make Zicarp a success," said Mashoko.
Nearly half of funeral assurers did not have risk committees at board and management levels, highlighting the need for the funeral sector to push for a robust risk governance.
Only 54% firms had documented policies and procedure manuals for managing material risk and 42% partially had, suggesting that the industry had challenges in implementing good corporate governance.
The research also unearthed that certain entities did not have documented framework for managing underwriting risk.Ipec director of pensions Josphat Kakwere urged insurers to give as much information as possible for the programme to succeed.
"Let's do our best so that we develop the final template. By end of November we expect you to have completed," said Kakwere.The entire framework is envisaged to be complete by February, 2020.
