Staff Writer

Zimbabwe’s financial sector must place consumer trust and fair treatment at the centre of insurance and pension reforms if it is to deepen financial inclusion and restore confidence in long-term savings, industry expert has said.

Speaking at the recent Insurance and Pensions Symposium hosted by the Insurance and Pensions Commission (IPEC), Erna Motinga, deputy chief executive for prudential supervision at Namibia’s financial regulator NAMFISA, said consumer protection is not merely a compliance requirement but the foundation upon which financial systems are built.

Her message comes at a critical time for Zimbabwe, where rebuilding trust in pensions and insurance remains central to expanding market participation and improving retirement security.

For many Zimbabwean workers, monthly pension deductions and insurance premiums represent more than financial transactions. They are contributions made in the hope that one day retirement income will be secure, claims will be honoured, and families will be protected against unexpected shocks.

But confidence can quickly erode when benefits are delayed, savings lose value, or policyholders feel misled.

“Consumer protection is not only about protecting individuals — it is about protecting confidence in the financial system itself,” Motinga said.

That message is particularly relevant in Zimbabwe, where pension fund value erosion, delayed claims, and concerns over transparency have historically undermined trust in the sector.

Motinga said consumers do not buy policies, pension products or contracts for their own sake — they buy peace of mind.

That peace of mind depends on confidence that insurers will pay valid claims, pension benefits will be available when needed, and financial institutions will treat customers fairly throughout the life of a product.

This is not just a consumer issue; it is also a macroeconomic one.

Trust drives market participation, supports financial inclusion, reduces transaction costs and encourages uptake of long-term savings products.

Global evidence cited by Motinga shows that half of consumers would buy more insurance if trust in insurers improved. Yet only about a quarter of consumers globally currently trust insurers, with claims experience being the biggest determinant of confidence.

For Zimbabwe, where insurance penetration remains relatively low and many workers are excluded from formal retirement systems, stronger consumer protection could become a powerful tool for broadening coverage.

Motinga outlined NAMFISA’s integrated approach to consumer protection, built around five pillars: prudential supervision, market conduct supervision, consumer education, complaints and redress mechanisms, and risk-based supervision.

For Zimbabwe, each of these pillars offers practical lessons.

The first pillar — prudential supervision — focuses on ensuring insurers and pension funds remain financially sound. This means maintaining adequate capital, managing risks properly, and operating under strong governance structures.

In Zimbabwe, stronger prudential oversight is critical in ensuring pension funds and insurers can meet long-term obligations, particularly in a volatile economic environment.

The second pillar — market conduct supervision — is equally important.

Motinga said consumer protection must extend beyond preventing institutional collapse to ensuring fair treatment while firms are operating normally. This includes making sure products are suitable, disclosures are clear, advice is appropriate, and claims are settled fairly and without unnecessary delays.

For Zimbabwe, this is especially relevant in addressing complaints around opaque policy terms, disputes over claims, and misaligned sales incentives.

A stronger market conduct culture could improve confidence and reduce disputes between consumers and providers.

The third pillar is consumer education.

Motinga said financially literate consumers are better equipped to understand products, compare options, identify unfair practices and plan for long-term needs.

Zimbabwe has made efforts in financial literacy, but gaps remain, especially in rural areas and among informal workers. Expanding public awareness campaigns around pensions, funeral assurance, life cover and savings products could improve uptake and help households make better decisions.

The fourth pillar — complaints and redress — is often overlooked but essential.

Motinga said even in well-regulated systems, problems will arise. What matters is whether consumers have accessible channels to raise concerns and whether institutions respond quickly and fairly.

Importantly, complaints data can also serve as an early warning system for regulators by highlighting patterns of misconduct or operational weaknesses.

For Zimbabwe, strengthening dispute resolution systems at both firm and regulatory levels could help rebuild confidence and demonstrate accountability.

The fifth pillar is risk-based supervision, which allows regulators to target areas where the risk of consumer harm is highest.

This approach is increasingly important as financial services become more complex, digital products expand, and new risks emerge.

Motinga also highlighted the need for enabling conditions such as strong laws, skilled supervision, industry engagement, enforcement powers, data analytics and public awareness.

Zimbabwe’s regulatory reforms in pensions and insurance are already moving in this direction, but implementation will be key.

For the country to grow insurance penetration and strengthen retirement systems, consumers must believe that the system works for them.

As Zimbabwe pushes for broader financial inclusion and long-term savings mobilisation, the lesson from Namibia is clear: consumer protection is not a brake on growth — it is a catalyst for sustainable market development.