Online Reporter
Tawanda Musarurwa, CheckPoint Desk
ZIMBABWE’S financial system has grown more inclusive over the past decade, with more adults holding bank accounts, using mobile money and participating in formal finance than ever before.
Insurance alone has moved the other way.
According to FinScope Zimbabwe’s 2022 consumer survey, formal insurance use fell from 26 percent in 2014 to 22 percent in 2022, even as bank-account ownership rose from 30 percent to 46 percent.
Similarly, mobile-money usage rose from 45 percent to 63 percent while formal financial inclusion overall grew from 69 percent to 84 percent.
Adults with no insurance cover — formal or informal — rose from 70 percent to 72 percent.
In a country of roughly seven million adults, insurance is the only major financial product shrinking while every other pillar of inclusion expands.
The Insurance and Pensions Commission (Ipec)’s 2026 first quarter short-term and funeral insurance reports suggest that retreat is accelerating.
Active funeral assurance policies fell 29 percent in a single quarter, from 114 651 to 81 528; direct short-term insurers’ policy books fell 8 percent, from 838 092 to 769 625.
A market built around car compliance
Of the 769 625 policies held with direct short-term insurers as at March 31, 2026, 675 299 (or 88 percent) were motor.
Add fire and two classes account for 68 percent of all revenue in the formal short-term market.
For roughly one in five Zimbabwean adults with formal cover, insurance is mostly the product the law requires everyone to have: third-party motor cover.
Everything else outlined in the two reports is tiny by comparison to the small, dollar-rich motor-and-fire market for car and property owners and a shrinking, cash-strapped funeral market for everyone else.
The invisible insurance market
If 72 percent of adults have no insurance, it does not follow that they are unprotected against risk. Much of the country’s risk-sharing happens outside anything Ipec regulates or FinScope classifies as insurance.
Burial societies, “mukando” clubs, livestock holdings, remittances from abroad, churches and extended family have long pooled resources against shocks — none of it captured in a premium book or policy count.
Earlier in February, financial services provider POSB moved to tap into this informal savings club system by launching its ‘Huruyadzo/Inkunzi’, a mobile-based group savings platform.
Ipec Commissioner Dr Grace Muradzikwa says the regulator is pressing insurers to respond to the growing informal sector.
“We also have that market development mandate, where we want to see the industry growing. Some of the conversations that we have been having with the industry of late are where we are seeing the growing industries of the economy. We are asking industry to respond to those growing sectors by coming up with products that speak to these sectors,” she said at the Ipec Forum in February.
“We have a large underserved population; we have seen some structural shifts in our economy where we are seeing a growing informal sector, so we ask the industry, are you coming up with products that speak to this growing informal sector?
“We have seen the recent fires at Matapi and Highfield, for instance. Are these people insured? The industry can come up with products that are relevant and digestible for the informal sector.”
An 80 percent dollar sector inside a 43 percent dollar economy
Short-term insurers generated US$78,71 million in revenue in the first quarter of 2026, 80 percent of it — US$62,71 million — priced in foreign currency, up 15 percent year on year: four years after Zimbabwe’s last currency-reset attempt, the short-term market has effectively dollarised.
Motor alone contributed US$26,72 million in dollar revenue, 43 percent of the foreign-currency book, fire added another 18 percent.
Funeral assurance tells the opposite story. Foreign-currency revenue was just 57 percent of the book and fell 36 percent year on year, from US$2,4 million to US$1,56 million, even as active policies collapsed 29 percent in a single quarter.
One market is dollarising because its customers — motorists, property owners and corporates — have dollar incomes; the other is priced out of dollars because its customers increasingly do not.
Short-term insurers’ claims ratio rose from 36 percent in Q1 2025 to 56 percent in Q1 2026; their combined ratio — claims plus expenses as a share of premiums, below 100 percent meaning underwriting profit — deteriorated from 88 percent to 99 percent.
Funeral assurance moved the other way, its combined ratio improving from 143 percent to 92 percent as the claims ratio collapsed from 63 percent to 8 percent.
The International Association of Insurance Supervisors (IAIS)’s Global Insurance Market Report (2026) explains the mechanism: motor and fire claims are heavily exposed to global inflation in imported parts, repairs, fuel and construction materials, and elevated oil and commodity prices have pushed claims costs higher across motor, property and liability lines worldwide.
Zimbabwe’s dollarised motor book rides that same global wave. Funeral claims, priced largely in local currency, got cheaper to service in real terms, even as households stopped paying premiums for the shrinking benefit.
Stability is redistributing gains and losses within Zimbabwean insurance and households are not the winners.
Five companies dominate the market
In short-term insurance, Old Mutual, Nicoz Diamond, Cell, Zimnat and Alliance together hold 66 percent of consolidated revenue and roughly 59 percent of sector assets; in foreign-currency business, the top five control 75 percent.
In funeral assurance, Moonlight Funeral Assurance alone holds 70 percent of sector assets and generates roughly two-thirds of revenue. A handful of incumbents dominate everywhere; a long tail competes for single-digit shares.
What Zimbabweans insure by choice
FinScope offers a different perspective. What people choose when they do buy insurance.
Among insured adults, funeral cover is by far the most common — 72 percent hold it, against 32 percent for motor and 30 percent for medical aid. Funeral cover is the people’s priority insurance product.
However, inside Ipec-regulated microinsurance, the money is going elsewhere.
The largest class by revenue is Legal Aid — ZiG41,9 million of the sector’s ZiG66,9 million total, representing 63 percent of the market — against ZiG5,2 million for Funeral Cash Plan and ZiG3,8 million for Health.
Coverlink alone controls 63 percent of the microinsurance market on that legal-aid book, rising to 72 percent of foreign-currency microinsurance revenue.
Funeral cover is the people’s choice; legal aid is where insurers found profitable scale, a mismatch that raises a real question: why are Zimbabweans buying legal protection ahead of health protection?
For some Zimbabweans, the reluctance to buy in has less to do with price than with trust. Mr Sam Njani (not his real name) is deeply sceptical of insurance.
“I think insurance is a scam; a person can spend years faithfully paying subscriptions, but if they stop paying for three months or so, the policy lapses. It’s literally free money for these companies,” he said. Such mistrust runs deeper than missed premiums. It is rooted in the destruction of policy and pension values during the 2007/08 hyperinflation, a legacy documented by the 2015 Justice Smith Commission of Inquiry.
Yet FinScope’s barriers data settles another debate. Half of uninsured adults say they cannot afford cover, more than double any single awareness-related barrier.
The issue of price helps to explain the 29 percent collapse in funeral policies during a quarter of currency stability and annual inflation of just 1,3 percent. Zimbabweans did not stop understanding funeral insurance; many simply stopped being able to pay for it.
Nor is the exclusion evenly distributed. FinScope found 81 percent of 18-35-year-olds have no insurance, against 66 percent of adults 36 and older; rural adults fare worse still, 79 percent uninsured against 62 percent urban.
The fintech revolution that pulled young and rural Zimbabweans into banking has not been replicated in insurance.
Climate cover is shrinking when climate risk is rising
FinScope explicitly warned that Zimbabwe’s climate risk exposure is worsening and called for expanded climate insurance to build farmer resilience.
The market has moved the other way. In 2026, farming premiums fell 25 percent year on year and Hail premiums fell 40 percent, even as Ipec pointed to improved rainfall and stronger agricultural prospects than the prior drought-affected season.
Insurers appear to be retreating from weather risk just as conditions turned favourable; likely still nursing losses from earlier drought volatility.
At the opposite extreme, Credit insurance (cover against a trading partner defaulting) grew 4 050 percent from a tiny base, the fastest-growing line in the short-term market, as businesses brace for counterparty failures even while headline indicators look calm.
Complaints and liquidity strains
Complaints against the short-term sector jumped 141 percent year on year, from 29 to 70,81 percent concerned with delayed claims settlement, almost identical to funeral assurance, where nine of thirteen complaints involved claims delays.
Nine of the sector’s 20 direct insurers reported negative working capital, and liquidity strain is feeding into customer experience.
One figure stands out. Allied Insurance recorded a complaints ratio of 1 099 percent — its share of complaints vastly exceeding its share of revenue.
Seven other insurers — AFC, Champions, Clarion, Credsure, Nicoz Diamond, Safel and Sanctuary – also topped 100 percent.
Being small doesn’t protect policyholders from poor service in a concentrated market; the data suggests otherwise.
A small industry by global standards
Short-term insurers and reinsurers are conventionally capitalised. Average prescribed-asset compliance stands at 15,35 percent and 16,19 percent respectively, both above the 10 percent statutory minimum, with unadjusted MCR compliance at 94 percent.
Funeral assurers look very different — their sector-wide prescribed-asset ratio is just 0,01 percent against the same requirement, while 67 percent of their balance sheet sits in property, plant and equipment (hearses, parlours, land) rather than financial investments.
The IAIS describes a world insurance sector with aggregate solvency ratios comfortably above regulatory requirements and return on assets approaching 1 percent; the country’s short-term insurers, with nine of 20 companies running negative working capital, and its funeral assurers, with a current ratio of 0,9 times, sit well outside that calm.
Zimbabwe’s insurance penetration was an estimated 2 percent of gross domestic product (GDP) in 2024; below the sub-Saharan African average of 2,8 percent, a third of the global average of roughly 6 percent, and far below neighbouring South Africa’s 11,5 percent.
According to a 2025 Statista report, Zimbabweans spent an estimated US$144,71 per person on premiums in 2025.
In addition to a performance gap, this is also a scale gap. The local insurance industry is small enough to be almost invisible inside the global data set regulators use to judge insurance health.
derick.khumalo