A senior official at the Insurance and Pensions Commission (IPEC) in Zimbabwe has urged local insurance companies to adopt blockchain technology to solve the low insurance and pensions penetration.

Adopt Blockchain Technology in the Insurance Industry

The chairman of IPEC, Lynn Mukonoweshuro, has advocated for the adoption of the blockchain in the insurance industry. She challenged the market to lead the way in adopting the technology to achieve universal access to insurance and pensions.

Mukonoweshuro said that the current methods of insurance delivery, which rely entirely on the use of brokers and agents, do not ensure financial inclusion.

She added that it was time to make use of technology to create products tailored specifically to the needs of ‘the digital customer’ as this has been a rising trend in the population.

“We have been challenging all our businesses to say we have been failing to drive insurance penetration through traditional methods, so it only makes sense that we do it in a techno-savvy manner that appeals to the new generation. And we are very conscious of the relevance and the positive impact of blockchain technology. We believe that for blockchain technology the time has come for us to embrace it as an insurance industry and take advantage of it to lower delivery of insurance to the population of Zimbabwe,” said Mukonoweshuro.

This call for action comes when many giant global insurance companies are embracing the blockchain with open arms. The technology is said to be able to better quantify and manage risk and improve underwriting and claims adjustments.

An Effective Solution

Marsh, an insurance broking and risk management company with a branch in Zimbabwe, uses commercial blockchain service for proof of insurance.

Marsh believes that the certificate of insurance process will be transformed “from complicated and manual to streamlined and transparent, allowing clients to speed up necessary business functions such as hiring contractors and transferring risk while increasing coverage certainty.”

Mukonoweshuro believes using the blockchain is an effective way of resolving the problem of low insurance and pension’s penetration.

“These technologies provide new ways to measure, control, and price risk, engage with customers, reduce cost, and expand insurability,” she concluded.

IPEC has already set aside resources that will go towards building capacity in the area of technology and financial inclusion. The regulator has also initiated a Research and Innovation Unit within IPEC. Their duty is to collaborate with institutions to ensure that they can facilitate innovation and digital transformation of the insurance industry.

Mukonoweshuro’s comments concur with newly appointed Finance Minister Mthuli Ncube’s views on technology. Minister Ncube said that Zimbabwe should invest in understanding innovations without dismissing the idea immediately.