primarily based on the specific risks you face and your individual claims experience. However, factors such as claims inflation, investment returns and expenses in providing the insurance service itself will have an impact. Most people and companies end up settling for inferior insurance cover because they perceive insurance to be expensive. Because times are tough there is need to ensure that expenses (including Insurance) fall within your budget. There is however need to ensure that the cover is not compromised. So how do you strike a balance between the cost of insurance and the right cover?
This assignment may be difficult to accomplish if you try and figure it on your own. An insurance broker’s services will help you achieve the best combination of price and coverage. Brokers are professionals that go through a rigorous training and academic study through internationally recognised academic institutions such as Insurance Institute of Zimbabwe (IIZ), Insurance Institute of South Africa (IISA) or Chartered Insurance Institute (UK). It also takes a minimum of three years for one to get a first degree in Insurance through local universities. These are people who are qualified and can provide you with the best advice through their knowledge of market products, terms and through understanding your operations and needs.
As said earlier on, the premiums you pay are a function of the assets you own, your claims experience and risk management initiatives in place among other variables. Insurance brokers are committed to keeping a database of your losses thereby ensuring accurate pricing of your risk. They also assist clients with risk management, which reduces the probability of you suffering losses; this ultimately reduces the premiums you will pay.
Your asset base also plays a key role in determining the premiums you will pay, but most insurance buyers do not have much knowledge on what to insure and how to insure. This results in an increase in the premiums payable and in most times unnecessarily so. By way of example, some insurance buyers will include land value under their re policy after extracting it from their assets register. This increases the cost of insurance because a declaration made to the insurance company will be higher, so with the aid of an insurance broker one will be able to cover only the assets that should be covered by insurance.
factors that affect insurance premiums and help you manage them. A broker will ensure that the pricing is transparent and will clearly explain the business rationale for any movements and all this is done at no additional cost to the client. Furthermore, apart from getting best advice, using an insurance broker also has a lot of extra benefits to the consumer. Brokers are regulated insurance professionals that meet minimum standards such as prescribed capitalisation and are thoroughly vetted by the Insurance and Pensions Commission (IPEC). They also take out Professional Indemnity Insurance as a fall-back position to clients in case of malpractice.
This article was written by Insurance Brokers Association of Zimbabwe (IBAZ).
Address: C/O Insurance Council of Zimbabwe Offices, 4 Josiah Tongogara
+263-242 708031/2 or mobile 0739454211