Inflation ramps up volume of premiums written
HARARE, ZIMBABWE’S insurance industry continues to contend with extremely challenging operating conditions, Fitch Solutions, said in its summary Zimbabwe Insurance Report.
The report noted that the country’s economy has struggled for several years, with currency volatility and periods of hyperinflation, and it suffered an additional setback in 2020 as Covid-19-related restrictions and external disruption led to a further sharp fall in GDP.
“While the economic headwinds are expected to wane over the coming quarters, private consumption will remain under significant pressure due to high rates of unemployment and the insurance sector offers little real short-term growth potential (though inflation will continue to ramp up the volume of premiums written,” the report said.
The country’s insurance sector has as a result of the covid 19 pandemic faced higher-than usual lapse rates and potential liquidity issues anticipated as customers’ incomes become constrained.
The industry also saw investment income negatively affected due to reduced re turns on property and equity investment.
At the same time, sales were hindered because e-signatures are not permitted for policy documents.
Country-wide interruptions in the power supply affecting insurers’ ability to operate, while increasing cyber and privacy risk due to remote working.