Zimbabwe’s aviation insurance sector is grappling with shrinking revenue, a trend industry insiders attribute to a limited pool of market players and the country’s broader economic turbulence.
According to players in the insurance and reinsurance industry, premium volumes from aviation insurance have not been impressive over the past years, mirroring challenges in the national aviation sector. With only a handful of insurers underwriting aviation risks, competition remains slim, limiting pricing innovation and product diversity.
Aviation insurance has traditionally been a niche market in Zimbabwe, closely tied to the operations of Air Zimbabwe and a handful of private charter companies. The grounding of some aircraft fleets, coupled with subdued passenger traffic and limited regional connections, has reduced demand for coverage.
Premiums in aviation are directly linked to aircraft movements and fleet sizes. With fewer planes in operation and less traffic, the revenue base has contracted significantly according to experts.
International reinsurers, wary of Zimbabwe’s macroeconomic volatility and currency risks, have tightened terms, raising costs for local insurers even as their revenue base shrinks.
According to the industry’s short-term Insurance report released by the regulator, Insurance Pensions Commission (IPEC), the aviation insurance revenue was US$0.45 million, contributing 1% of the insurance sector revenue for the first quarter of 2025. Aviation insurance revenue dropped sharply by 73% as it plunged down from $1.68 million for the same period in 2024.
IPEC said these substantial declines may be attributed to timing discrepancies in revenue recognition following the transition from IFRS 4 to IFRS 17 reporting.
“As entities fine tuned their reporting systems during the transition period, the changes negatively impacted some revenue lines, particularly in the hail and aviation segments.”
But, IPEC said, regarding aviation insurance, it is important to note that most of the business is generated from a few key players, including Air Zimbabwe.
“The recent announcement of the sale of two Air Zimbabwe B777-200ER passenger planes may partially explain the decline in aviation insurance revenue,” the regulator added.
The aviation insurance market is categorised into hull and liability insurance, war and terrorism insurance, passenger liability insurance, and aircraft damage coverage. The personal accident policy covers pilots and members of the aircrew against death or bodily injury which include medical expenses. They are covered only when an incident occurs whilst they are flying, boarding into the aircraft or alighting from the aircraft.
The International Air Transport Association (IATA) reports that the hull and liability insurance segment led the global market in 2023 and continues to play a key role, with projections indicating that it will continue to rise in the years to come.
According to an IATA report, the growing demand for coverage that aids in sustaining losses due to actual aircraft damage and legal liabilities in the event of accidents is credited with the segment’s growth.
In the past five years Zimbabwe has seen a surge of business people and politicians buying helicopters and private jets, avoiding the use of roads in local visits and public aircraft in regional trips. Given the considerable hazards involved in owning and operating an airplane, Patson Mhike, an actuarial scientist and member of Actuarial Society of Zimbabwe, stated that getting insurance is strongly advised for aviation owners, operators and enterprises.
“With all the surge in purchase, unfortunately it does not reflect on the aviation insurance balance sheet, rather it’s on the record negative, raising questions on whether the aircraft are insured or not. If insured, it means definitely not in Zimbabwe.”
According to Mhike, knowing insurance costs enables private aircraft owners, airlines, flight schools and charter firms to make well-informed judgments about acquiring the appropriate amount of coverage.
“Aviation insurance is mandatory to businesses and stakeholders involved in flying. Aviation and aircraft insurance works to manage the unique risks of flying. Unfortunately, in Zimbabwe the market is slim because of few players. But those available, even private players, must be encouraged to be insured with local firms,” said Mhike.
Concentration risk
The limited number of insurers able to write aviation risks has raised concerns of concentration. Risk experts warn that in the event of a major aviation incident, the few players underwriting policies could face severe solvency pressures.
“Capacity is slim. Aviation requires strong balance sheets and reinsurance backing. With only a handful of players in the market, systemic risks are elevated,” said Tendai Mutseyami, a Harare-based risk consultant.
In 2015, Fastjet Limited Zimbabwe commenced operations, flying from Harare to domestic destinations, which was followed by the expansion with regional flights to South Africa. This year, Fastjet celebrated its 10th successful year of operations in Zimbabwe. The carrier continues to operate daily return services between Harare and Bulawayo, Harare and Victoria Falls, and internationally from Harare, Bulawayo and Victoria Falls to Johannesburg in South Africa, which remains a popular destination choice for Fastjet customers.
“But, we need more players in the market. More players translate to more business. This lack of diversification not only suppresses competition but also creates bottlenecks for innovation in aviation-specific products such as hull war risk and liability coverage,” said Mutseyami.
By contrast, regional peers such as South Africa and Kenya have broader aviation insurance markets, buoyed by stronger air traffic growth and more vibrant private aviation sectors. Zimbabwe’s sector, Mhike notes, will likely remain subdued unless air transport volumes increase and new insurers enter the niche.
The competitive landscape is characterised by intense competition, with established players trying to maintain their market share while new entrants try to disrupt the market.
Still, industry observers see potential in regional integration efforts. Should Zimbabwe deepen ties with Southern African aviation hubs and expand private charter operations, aviation insurance premiums could rebound.
“However, this depends on broader macroeconomic stabilisation and improvements in the business climate,” said Mhike.
In August this year, the Ministries of Transport, Tourism and Hospitality launched the first flight from Harare to Mutare, serviced by Air Zimbabwe. The region is home to some of the most-visited tourist sites and a hub for regional meetings.
“This is an opportunity for new players to come on board, service the route and even have some direct links to neighbouring Mozambique and South Africa,” said Mutseyami.
“Zimbabwe’s aviation insurance sector without reforms to broaden participation, the market risks stagnation, leaving insurers and the sector at large struggling to stay airborne.”
Major players in the aviation insurance market are always looking to develop new products and services, broaden their geographic reach, and establish strategic alliances. Leading companies in the aviation insurance market are making significant investments in research and development to produce innovative solutions that satisfy the changing demands of the industry.
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