Staff Writer
Zimbabwe’s life assurance sector delivered a stronger performance in the second quarter of 2026, with insurance revenue rising sharply on the back of increased foreign-currency business and continued demand for funeral and group life products.
However, the latest sector report from the Insurance and Pensions Commission (IPEC) also highlights structural weaknesses that could constrain the industry’s long-term development, including high market concentration, rising policy lapses, limited product diversification and the need for stronger risk management.
Direct life insurers generated insurance revenue of ZWG3.79 billion during the period under review, equivalent to approximately US$147.04 million at the average official exchange rate.
This represented a 34 percent increase from US$110.05 million recorded in the corresponding period of 2025.
The growth is significant because it points to a continued expansion in the sector’s top line, but the composition of that growth is equally important.
Foreign-currency-denominated business accounted for 57 percent of total insurance revenue, up from 54 percent in the comparable period last year.
Foreign-currency insurance revenue increased 41 percent to US$83.21 million from US$59.21 million in the second quarter of 2025.
The increase reflects growing consumer preference for foreign-currency-denominated policies, particularly in an environment where policyholders remain sensitive to currency and purchasing-power risks.
The shift towards foreign-currency business provides insurers with greater revenue stability and potentially better matching between premiums, investments and future claims.
At the same time, it increases the importance of disciplined asset-liability management, particularly given the regulatory requirement for foreign-currency business to be backed by assets denominated in the same currency.
The sector’s revenue structure, however, remains heavily skewed towards funeral assurance.
Funeral assurance generated 72 percent of total insurance revenue, while group life assurance contributed another 11 percent.
Together, the two products accounted for 83 percent of sector revenue, unchanged from the previous year.
This concentration demonstrates the strength of demand for products that address immediate and tangible financial risks faced by households and employers.
It also exposes the industry to concentration risk. An insurance market that depends heavily on a narrow group of products may find it more difficult to sustain growth if consumer preferences, disposable incomes or demographic patterns change.
The dominance of funeral assurance is particularly evident at company level. Nyaradzo Life, Doves Life and Evolution Life generated all their revenue from funeral assurance, while Nyaradzo Life alone commanded 47 percent of total sector insurance revenue.
Nyaradzo Life, Doves Life and Old Mutual Life together controlled 72 percent of the market based on insurance revenue.
IPEC’s Herfindahl-Hirschman Index of 2,283 further indicates a highly concentrated market, suggesting that a relatively small number of insurers account for a substantial proportion of industry activity.
The concentration should therefore become a strategic consideration for the sector rather than simply a measure of market structure.
Smaller insurers need to identify sustainable niches, while established players should continue investing in product innovation and service quality to deepen the overall insurance market rather than relying predominantly on established product lines.
The product distribution also reveals considerable opportunities for diversification.
Credit assurance accounted for 8 percent of insurance revenue, term assurance 4 percent and endowment assurance 3 percent.
Miscellaneous, pure endowment and whole-life products each represented relatively small portions of the market.
The figures suggest that Zimbabwe’s life assurance industry has considerable room to develop products around savings, retirement planning, education, health-related financial protection and other emerging consumer needs.
This is particularly important as consumers become more sophisticated and increasingly seek financial products that combine protection, savings and investment features.
IPEC’s Regulatory Sandbox provides an important platform for this transition. The regulator reported that innovative product applications were being received through the Sandbox during the review period.
Insurers should make greater use of this framework to test products before taking them to the wider market. Innovation, however, should not simply mean introducing more products. New products must solve identifiable consumer problems, remain affordable and provide clear value.
The sector’s biggest immediate warning sign is policy persistency.
At the beginning of the quarter, insurers had 2.12 million lapsable policies. During the period, 309,409 policies lapsed, producing a lapse ratio of 14.56 percent, up from 13.6 percent in the corresponding period of 2025.
The increase suggests that revenue growth is being accompanied by pressure on policy retention. This is important because insurance growth cannot be judged solely by new business written. A sustainable life assurance industry must retain existing policyholders and maintain long-term relationships.
The higher lapse rate in individual life business compared with group business may reflect affordability pressures and the difficulty households face in maintaining recurring premium commitments.
Insurers should therefore rethink product design around the realities of household incomes. Flexible premium structures, affordable entry-level policies, payment options aligned with customers’ income cycles and products that allow temporary premium adjustments could help improve persistency.
The 28,722 policies that were not taken up during the quarter provide another warning. These policies represented probable lost revenue of ZWG5.36 million, or about US$0.21 million.
Although the financial loss is relatively modest compared with total industry revenue, the underlying issue is important. Not-taken-up policies may indicate gaps between how products are sold and how customers understand their obligations.
Insurers should strengthen agent training, sales supervision and consumer education. Customers need to understand premiums, exclusions, benefits, waiting periods and the consequences of non-payment before committing to a policy.
Another area requiring careful attention is reinsurance.
The sector ceded only US$2.28 million, equivalent to ZWG58.80 million, to reinsurers during the quarter, representing a reinsurance ratio of just 2 percent.
IPEC attributes the low ratio largely to the dominance of products that do not incorporate reinsurance arrangements. Nevertheless, insurers should periodically reassess whether their retention levels are consistent with their capital strength and risk appetite.
Reinsurance is not simply an additional cost. Properly structured, it enables insurers to transfer potentially significant liabilities, optimise capital and protect their balance sheets against adverse claims experience.
The sector’s balance sheet remains substantial. Total assets stood at approximately US$835.15 million as at June 30, 2026, up 1 percent from US$826.69 million at the end of March.
Investment properties, equities, related-party investments and biological assets accounted for 70 percent of total investment assets. These investments can provide long-term returns and an inflation hedge, but they also require disciplined portfolio management and careful attention to liquidity and asset-liability matching.
Going forward, the industry’s priorities should therefore extend beyond revenue growth.
Life insurers should diversify their product portfolios, improve policy persistency, strengthen consumer education, expand affordable and inclusive products, deepen digital distribution and make greater use of the Regulatory Sandbox. They should also maintain prudent reinsurance arrangements and ensure investment portfolios remain aligned with regulatory requirements and the liabilities they are intended to support.
The second-quarter figures show that Zimbabwe’s life assurance market has the capacity to grow. The 34 percent increase in insurance revenue and 41 percent rise in foreign-currency revenue are encouraging indicators.
But the more important test will be whether this growth can be converted into a broader, deeper and more resilient insurance market.
For insurers, the opportunity is to move beyond dependence on funeral assurance and build products around the full financial lifecycle of Zimbabwean households and businesses.
For the regulator, continued emphasis on market conduct, innovation, consumer protection and financial soundness will be critical.
The next phase of growth should therefore be measured not only by how much premium is collected, but by how effectively the industry retains customers, diversifies its revenue base, protects policyholders and converts insurance into a more meaningful instrument of long-term financial security.
