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Insuring exports against possible damage or risk of loss is a vital aspect of international trade that serves as a safety mechanism targeted at enhancing sustainability in any business venture although it is usually overlooked by some of the exporting firms especially those in developing countries.

In Zambia, the situation is such that the majority of exporting companies perceive insurance as not being the most cost-effective way of conducting business but an additional expense that can be avoided while forging ahead profitably.

Current reports indicate that Zambian exporters, particularly those in the informal sector, do not bother to seek insurance protection for their goods as they transport them across borders.

It should however be borne in mind that any exports lost or damaged is not only a loss to the exporter but the country as a whole in terms of the valuable foreign exchange earnings.

Therefore, the Zambian exporter should be aware of the five major factors affecting the insurance industry by way of providing niche market possibilities.

The factors comprise the changing consumer attitudes, deregulation, and pressure to reduce tariffs for services, demographics, the internet and product liability laws.

Deregulation has the effect of causing many state-owned insurers to lose their monopoly on the local markets.

This has seen a niche market emerging for consulting services in areas such as regulatory reform, modern insurance codes, privatisation or restructuring of state monopolies and recapitalisation of financially troubled insurance companies.

The above scenario has given clients a wide choice of services apart from the traditional bundle services that were being offered in a monopolistic environment since the private sector has introduced alternative services. Those providing the options comprise banks, credit card firms and product suppliers.

In addition, more of the insurers and clients have begun to use the internet. The demand for this channel is rising enormously in developing countries to pave way for intense competition for the local insurance firms. Internet is also offering cost effective opportunities for reaching client groups especially in the developing markets that were left behind in the past.

On the Zambian scene, the International Cargo Scheme (ICS) is one form of insurance products that Zambian exporters can take advantage of. The scheme takes care of all risks involved during the transportation of exports and imports for Zambian firms.

The unique feature of the scheme is that the movement of goods is monitored everyday during the shipment by the surveillance programme engineered by insurers such as the Zambia State Insurance Corporation who have a worldwide network of cargo surveyors.

The ICS actually provides risk cover on a warehouse-to-warehouse basis that implies from point of origin to the final destination. Premiums are paid in hard currency thus ensuring that claims for loss or damage due to uninsured peril are also settled in hard currency.