Staff Writer
Zimbabwe’s rapid economic formalisation is creating thousands of new potential insurance customers among small and medium enterprises (SMEs), informal traders and entrepreneurs, presenting insurers with a major growth opportunity, Insurance and Reinsurance Development Committee (AIRDC) vice president Patrick Kusikwenyu has said.
Kusikwenyu, delivering welcome remarks at the 24th AIRDC conference in Harare, said the influx of previously informal businesses and entrepreneurs into the formal financial system would require insurers to rethink how they develop, distribute and service products.
He said traditional insurance products were often designed for different customers and market conditions, making adaptation essential if insurers were to capture emerging opportunities while improving financial inclusion.
“Many of our traditional products were designed for a different customer and a different era. As new segments enter the formal economy, we must rethink product design, distribution models, premium collection, and claims processes to ensure insurance remains relevant, accessible, and impactful,” Kusikwenyu said.
The development comes as the insurance industry faces a rapidly changing risk environment characterised by climate change, geopolitical tensions and technological disruption.
Kusikwenyu said Zimbabwe’s formalisation drive should therefore not be viewed simply as an economic policy development, but also as an opportunity for insurers to expand their customer base by developing products suited to the needs and income patterns of emerging businesses.
He said insurers needed to move beyond conventional approaches and develop solutions that could accommodate customers who may have different risk profiles, cash flows and insurance needs from established corporate clients.
At the same time, Kusikwenyu warned that climate-related risks were becoming an immediate threat to African economies, with droughts, floods, cyclones and increasingly erratic weather patterns already affecting livelihoods and businesses.
“Drought, floods, cyclones, and erratic weather patterns are no longer future threats. They are present realities affecting livelihoods, affecting businesses, and economies,” he said.
He called for greater use of innovative risk-transfer mechanisms, including parametric and index-based insurance, particularly for vulnerable communities exposed to climate shocks.
Such products, he said, could help broaden the role of insurance in building economic resilience beyond traditional indemnity-based cover.
Kusikwenyu also highlighted the impact of geopolitical conflicts on developing insurance markets, saying wars in Europe and the Middle East had disrupted trade routes, pushed up energy and commodity prices and affected reinsurance capacity.
For developing economies already dealing with currency volatility and limited capital, he said geopolitical disruptions could have disproportionate consequences.
“We must interrogate, as an industry, how we price political risk, how we structure our reinsurance arrangements and how we engage the regulators to preserve market stability,” Kusikwenyu said.
Despite the challenges, he said Africa’s relatively low insurance penetration represented a significant opportunity for the industry.
“Africa’s insurance penetration remains among the lowest in the world, and that is not a statistic. It is an invitation,” he said.
Technology, he added, was creating new possibilities for insurers to reach underserved populations through artificial intelligence, advanced analytics, mobile platforms and satellite-based monitoring.
These technologies could lower distribution barriers, improve risk assessment and support wider financial inclusion if deployed appropriately.
Kusikwenyu said the AIRDC, which was founded on the principle that developing markets are stronger when they collaborate, provided an important platform for regulators and industry players to exchange experiences and develop practical responses to common challenges.
He urged delegates at the Harare conference to use the gathering to forge partnerships and develop solutions capable of strengthening the resilience and sustainability of developing insurance markets.
“Insurance is the quiet foundation upon which economic recovery, social stability, and national development are built,” he said.
The 24th AIRDC conference is being held in Zimbabwe for the second time, following the country’s previous hosting of the event in Victoria Falls in 2013.
Kusikwenyu said Zimbabwe was proud to host the conference and urged international delegates to use the gathering to build stronger regional and international relationships.
