Online Reporter
Tapiwanashe Mangwiro
Zimbabwe’s insurance regulator has raised concerns that growth in the life assurance sector is being driven by a narrow range of short-term products, raising questions about sustainability and policyholder protection.
This is contained in the Insurance and Pension Commission’s (IPEC) Life Assurance Sector Report for the quarter to September 30, 2025.
IPEC raised concerns about the potential risks from the narrow product range despite the sector posting strong revenue growth in the nine months to September 30, 2025.
According to IPEC, life insurance revenue rose 39 percent to about US$172,05 million, buoyed mainly by funeral and group life assurance products, which now dominate the market.
“During the review period, direct life insurers generated insurance revenue of ZiG$4,59 billion, which converts to approximately US$172,05 million using the average official exchange rate. This reflects a 39 percent change from the US$123,77 million recorded in the same period of 2024,” IPEC said.
The sector consisted of 12 registered life insurers during the review period, supported by 1 760 corporate and individual agents, marginally higher than the previous quarter’s 1 746.
While the modest growth points to gradual expansion in distribution capacity, the industry regulator said the structure of income remained heavily skewed.
Funeral and group life assurance jointly accounted for 82 percent of total industry revenue, underlining the sector’s growing dependence on products with short policy cycles.
Funeral assurance alone contributed 68,04 percent of total revenue, while group life assurance accounted for 14,27 percent.
“Funeral assurance remains the main driver of the life assurance sector, representing 68,04 percent of total revenue. Group life assurance is the second largest segment, making up 14,27 percent of total revenue,” IPEC noted.
Outside these dominant segments, credit assurance emerged as the largest contributor, accounting for 7,90 percent of revenue, followed by term insurance at 4,35 percent and other life products at 4,3 percent.
Traditional long-term instruments such as endowment plans and whole life policies continued to lose relevance, contributing less than 1,2 percent combined.
IPEC warned that the rising dominance of short-term cover is steadily eroding the market share of conventional long-term life assurance products, altering the sector’s risk profile.
“A notable trend in the life insurance industry is the shift from traditional long-term products towards predominantly renewable annual policies. This change is especially clear in funeral assurance and group life assurance policies currently available,” the commission said.
The regulator cautioned that the shift could undermine the objectives of the Funeral Directive, particularly around consumer protection and long-term value preservation.
“This practice raises regulatory concerns about its compliance with the Funeral Directive’s objectives, particularly regarding the level of policyholder protection. As a result, the industry is strongly encouraged to strictly follow the rules set out in the Funeral Directive,” IPEC added.
On currency composition, foreign currency-denominated revenue accounted for 55 percent of total insurance income, down from 62 percent in the previous period. IPEC attributed the decline largely to relative exchange rate stability during the review period, which reduced the incentive for dollar-indexed pricing.
