Tuesday, August 3, 2021

Local insurer shares COVID 19 experience amid challenging business environment

The COVID-19 pandemic has shone a light on the need for the African insurance sector to demonstrate its critical role in supporting people and businesses. The pandemic has been the most severe risk event in Africa in years, but many insurers across the continent have not delivered on their promise. 

In Botswana, the leading life insurer – Botswana Life however says although it’s not business as usual due to COVID 19, the company has not changed its pricing or policy terms and conditions. 

“We do not intend to make changes to the pricing or introduce exclusion for high risk age bands. This simply is not the right thing to do in our view,” says Gabriel Tlagae – Botswana Life Communications and Marketing Manager. 

Tlagae explains that the insurance sector has experienced some type of negative impact due to the COVID pandemic presence in the world. He admits that it is true that in some markets, insurance providers do not pay death benefits when COVID-19 is the cause of death, adding that this could be for many reasons. 

“At Botswana Life, we want to be as supportive and helpful to our clients in this pandemic as we can be, and Board and management have taken a firm and strategic decision to provide assistance where possible.”

Across the world it is reported that some insurance providers are taking age into consideration as a risk factor for Covid 19. Hence they have suspended new life policies for older adults 60 years and older. 

In response, Tlagae says, “we agree that there are some age ranges that are at high risk compared to others that are viewed as low risk; the elderly, for example, and often cautioned to be more prone to succumbing to the effects of the pandemic, and this has been shared by a number of reputable health authorities. We take guidance from them, including Botswana Government and our Ministry of Health and Wellness.”

In Botswana atleast 254 people were reported dead by February 15 with the cause of death linked to COVID 19. 

Given the rising numbers, Tlagae says Botswana Life policies continue to pay benefits in cases where the cause of death is COVID-19. 

“This is provided that all other policy terms and conditions are met.  We do not intend to change this position in the foreseeable future”

Life insurance continues to dominate the insurance industry in Botswana contributing a significant share to the country’s Gross Domestic Product (GDP). 

According to the 2020 Non-Bank Financial Regulatory Authority Annual report revealed the sub-sector’s contribution to GDP remained high by regional standards but was unchanged at 3.5 percent as overall gross written premiums remain steadily at P5.4 billion for two consecutive years in 2018 and 2019. The report also shows that during the year ending December 31, 2019 the market share of industry assets and Gross Written Premiums for the Life Insurers were 86 percent and 72 percent respectively.

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