Zimbabwe’s insurance sector is experiencing a rare silver lining amid the country’s broader economic challenges—a surge in vehicle imports that is driving renewed growth in the motor insurance line of business. However, insurers have mounting claims to worry about.
In a market characterised by volatile exchange rates, shrinking disposable incomes and subdued investment activity, the steady influx of imported vehicles, mainly second-hand Japanese models, has become a lifeline for insurers battling declining revenues in other lines of business.
As Zimbabwe experienced a trade deficit early this year, motor vehicle imports climbed to US$24.1 million in March from US$21.4 million in February, driven by demand for transport vehicles to support infrastructure and mining activities.
The latest industry’s short-term insurance quarterly report shared by the regulator ending 30 June 2025 shows the majority of policies reported during the half year were under the motor line of business. Projections point at sustained growth.
According to industry projections, Zimbabwe’s motor insurance market is set to reach a gross written premium of about US$563 million in 2025, with spending per capita estimated at US$32.43. Analysts expect the market to expand modestly at an annual rate of 1.69% through 2030, driven primarily by sustained vehicle imports and gradual adoption of comprehensive coverage.
“The motor vehicle insurance market in Zimbabwe is witnessing a surge in demand due to an increase in vehicle ownership and a growing awareness of the importance of insurance coverage,” said Munashe Chikwinya, an economist.
Steady growth
Motor vehicle insurance has continued its upward trajectory, cementing its dominance as the leading class within the short-term insurance market. According to the Insurance and Pensions Commission (IPEC) second-quarter performance reports, motor insurance has consistently accounted for the bulk of gross written premiums (GWP) over the past five years.
In 2021, the segment contributed US$16.63 million, rising to US$19.98 million in 2022. The growth accelerated sharply in 2023, with GWP surging to US$34.24 million—a remarkable 71% increase. The momentum carried into 2024, when motor insurance premiums reached US$38.91 million in the same quarter. As of 30 June 2025, the figure has climbed further to US$47.05 million, underscoring both the growing demand for vehicle cover and the pivotal role motor insurance continues to play in sustaining the short-term insurance sector’s overall performance.
Chikwinya attributes the uptick to a combination of factors, including increased vehicle imports and a gradual shift toward comprehensive cover among middle-income motorists seeking to safeguard their assets.
“Motor insurance has become the backbone of the short-term industry,” said Innocent Chisveto, a risk insurance consultant and BeForward Japan Agent in Harare. “With the volume of imported vehicles entering the market each month, insurers are seeing consistent demand for third-party and comprehensive policies. It’s one of the few growth areas in an otherwise constrained economy.”
According to Focus2move, a consulting firm in the motor vehicle industry, few Zimbabweans buy new vehicles—approximately 2,700 per annum. Most of the motorists depend on used imports. Data from the Zimbabwe National Statistics Agency (ZimStat) show that vehicle imports grew by over 25% in 2024, compared to the previous year, with more than 70,000 vehicles—mostly used cars from Japan, Singapore and the United Kingdom, brought into the country.
Analysts link this trend to the partial liberalisation of import regulations and a growing preference for owning personal vehicles as public transport gets more chaotic. The appreciation of the Zimbabwe dollar in parts of 2024 and the wide availability of foreign currency in the informal market have also made vehicle purchases more attainable for many urban Zimbabweans.
“Cars have become both a status symbol and a functional necessity,” said Chikwinya. “The unreliable public transport system and the need for mobility in small-scale trading and informal business have made car ownership a practical choice. This, in turn, expands the base for motor insurance uptake.”
To capture this growing market, several insurers have rolled out digital insurance platforms allowing customers to buy and renew policies online. These innovations are improving convenience.
The government introduced another Statutory Instrument (SI 111 of 2024) which amended previous restrictions on vehicle imports, repealing previous restrictions of SI 89 of 2021 which required an import licence for specific second-hand vehicles.
Zimbabwe’s Ministry of Industry and Commerce issued a licence for all second-hand vehicles being imported to Zimbabwe. The age limit does not apply to commercial vehicles as specified. This has opened a door for more used commercial vehicles entering Zimbabwe. However, for light vehicles, Zimbabwe gazetted the SI 54 of 2024 which completely banned the importation of second-hand vehicles aged over 10 years and requires the person who imported the vehicle to re-export it at their own cost.
Mounting claims
Despite the surge in premiums, insurers face mounting claims linked to inflationary pressures and the rising cost of spare parts. Imported components for accident repairs are denominated in U.S. dollars, stretching insurers’ claims reserves and eroding profit margins.
“The challenge now is not premium growth, it’s claims inflation,” said Chikwinya. “When a bumper or headlamp costs more than half the vehicle’s market value, we have to balance fair compensation with financial sustainability. Currency volatility makes pricing policies extremely complex.”
Industry experts are urging insurers to adjust their underwriting models and strengthen risk-based pricing to ensure long-term viability. Some firms are exploring partnerships with local car dealers and repair shops to secure better parts pricing and faster claims processing.
Chikwinya cautions that “without local automotive production or formal credit facilities, the import-driven growth is not sustainable. However, for now, it is a vital source of liquidity and employment within the insurance ecosystem.”
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