TINASHE MAKICHI
Zimbabwe’s dedicated funeral assurers’ operations are hamstrung by tight finances as the Covid-19 pandemic ravages the sub-sector amid indications some players are battling to settle claims, players said this week.
Others are struggling to cope with the rising number of burials per day due to exponential increase in number of deaths due to the deadly virus.
This comes as the Ministry of Health and Child Care recently declared Zimbabwe a Covid-19 hotspot with cases coming from everywhere.
This has seen government urging citizens to stay at home, adding that leaving home is a life or death decision.
The pandemic is now threatening the funeral firms’ going concern status.
Zimbabwe has reported more than 22 000 Covid-19 cases and over 500 deaths since March last year.
Players in the funeral assurance sub-sector claim that bodies are piling up. At times, they are also forced to wait at the cemeteries while graves are being prepared.
The situation has been further worsened by financial claims that come with the rising deaths.
Zimbabwe Association of Funeral Assurers president, Solomon Chikanda said the industry was in a crisis.
“It may appear that we have a surge in request for services on the face of it but we are still compiling actual industry reports for us to have the actual results.
So, I think we will be able to properly comment at the end of the month when that is done,” Chikanda said.
An investigation by Business Times showed that some funeral assurers are severely stretched by demands coming with rising deaths due to the pandemic.
Most mortuaries, according to industry players, are full resulting in some bodies being kept in body bags once certified as a Covid-19 case.
“Our mortuary capacity has been put under massive strain and this is a wake-up call for all funeral assurers to work on their holding capacity.
In the fridge facility, bodies are all in body bags.
So, from the hospital when we pick up the body, it has to be put in a coffin immediately in front of the hospital and it is stored as it is,” an official at a funeral assurer who requested anonymity, told Business Times this week.
Zimbabwe’s economic crisis has further plunged the funeral assurance sub-sector into a calamity as only a few registered players were compliant with the minimum capital requirements at the end of September 2020.
According to the Insurance and Pensions Commission latest report published this week only three out of eight funeral assurers reported capital positions that were compliant with the regulatory minimum capital requirement of ZWL$62.50m as prescribed in Statutory Instrument 59 of 2020.
This was an improvement of one player that was not compliant as at June 30, 2020.
The situation was exacerbated by their failure to have the critical re-assurance arrangements in place in the nine months to September 30,2020.
The move, which has exposed funeral assurers’ balance sheets and policyholders, has added widespread uncertainty in the already fragile sub-sector.
Ordinarily, re-assurance arrangements would have given funeral assurers increased stability in a year hit by volatility due to the Covid-19 pandemic.
Insurance companies re-assure to spread their risk of loss.
But this has not been the case with Zimbabwe’s funeral assurers who ditched re-assurance arrangements.
