Zimbabwe’s insurance market could unlock wider and more sustainable coverage by offering products that better reflect customers’ cash flows on the back of short-term insurers losing more than 68,000 policies in the first three months of this year.
Insurance and Pensions Commission (IPEC) data showed direct insurers recorded 264,495 policy exits and 196,028 new policies during the first quarter of 2026, leaving a net decline of 68,467 policies. The total number of policies held by direct insurers fell to 769,625 at the end of March from 838,092 at the end of December, an 8% decline, according to the regulator.
The figures have raised questions about whether Zimbabwean consumers are struggling to maintain insurance amid affordability pressures and a difficult economic environment. The regulator’s figures do not, however, establish that all of the 68,467 policies were deliberately cancelled by consumers.
“This decline suggests a contraction in the policy portfolio during the quarter under review, potentially reflecting changes in customer preferences, market conditions, or underwriting activities,” said IPEC.
Tafadzwa Maguraushe, a retired insurance agent with over three decades of experience working in low-income communities, said policies can leave insurers’ books for different reasons.
“Without detailed data on why policies leave, it is difficult to determine whether consumers are abandoning insurance altogether or moving between providers. A customer who cancels a policy with one insurer and buys another elsewhere has not necessarily left the insurance market. Similarly, an annual policy that expires during the quarter may appear as an exit even if the customer renews later. But again, we see issues of affordability and better services influencing these decisions,” said Maguraushe.
Foreign currency covers in focus
Francis Zindoma, an independent economist, said Zimbabwe’s increasing reliance on foreign-currency insurance also presents a challenge for consumers whose incomes are not consistently earned in US dollars. Foreign-currency premiums help insurers to manage the costs of claims and other obligations in an economy where imported goods and services are often priced in foreign currency.
“While the insurance market demands US dollars to protect itself from local currency volatility, a vast portion of the population, especially civil servants, formal workers, and small to medium companies that trade with the government, earn their primary income either entirely or partially in ZiG. Because official banking channels restrict easy access to foreign exchange, individuals are often forced to buy US dollars on the parallel market at much higher, punitive exchange rates. This drastically inflates the actual monthly cost of keeping an insurance policy active,” said Zindoma.
Foreign-currency business accounted for about 80% of direct insurers’ insurance revenue in the first quarter.
New covers offer hope
The first-quarter figures show that nearly 196,000 new policies were written, meaning there was continued demand for insurance. But the number of policies leaving insurers’ books was substantially higher.
Charles Nyazema, an expert in insurance markets and a lecturer at the University of Zimbabwe, said if consumers are moving between companies because of price, insurers may respond with more competitive premiums or benefits. He also suggested more of the possible scenarios.
“If customers are cancelling because they cannot afford the cover, insurers may need to develop lower-cost products and more flexible payment arrangements. If policies are being allowed to lapse because consumers do not understand their value or renewal requirements, communication could be part of the solution. And if claims experiences are damaging trust, insurers may need to improve claims handling,” he suggested.
Insurers have been encouraged to ensure that products remain financially viable. The sector’s combined ratio of 99% in the first quarter shows how closely underwriting costs and claims are approaching the value of premiums earned.
“Cutting premiums without adjusting the risks being covered could put further pressure on insurers. The challenge is to design products that are affordable for customers while allowing insurers to remain financially capable of paying claims,” said Maguraushe.
The decline in existing policies is taking place alongside a much larger problem of limited insurance penetration in Zimbabwe.
“Rather than simply losing existing customers, insurers are also operating in a market where a large majority of the population has little or no insurance protection,” added Maguraushe.
The decline in policies in the first quarter comes despite strong revenue growth in other parts of the industry. Direct insurance companies reported 2.08 billion Zimbabwe Gold dollars (ZWG) (US$81.33 million), in insurance revenue. Foreign-currency business accounted for about $64.85 million, or 80%, of the total.
Flexible premiums
The contrasting figures, rising foreign-currency revenue alongside a shrinking number of policies, are drawing attention to the changing profile of Zimbabwe’s insurance market. Retaining customers has become an increasingly important issue to insurers as households and small businesses face competing demands on their income. In Zimbabwe’s informal economy, where many people earn irregular incomes, the timing of insurance payments can be as important as the overall cost of cover.
Nyazema said the growing public complaints regarding unpaid claims, hidden terms, and payout delays make people reluctant to renew policies. But, for years now, average citizens cannot afford these higher rates, forcing many to drop non-mandatory insurance coverage altogether.
“The informal economy is huge in this country, comprised mostly by self-employed people. Income for these people vary considerably from one month to another. In that situation it becomes a matter of priorities, starting with issues to do with survival, food and bills. Under such circumstances an insurance premium can become an expense that is deferred when cash is tight,” said Nyazema.
But insurers already offer some flexibility in how premiums are paid. The regulator dictates that insurers must have frameworks that clearly break down premium levels, accompanied by payment frequencies. Most of the insurers have the arrangements in place. While announcing its ‘Whole Life Plan’, Zimnat said some of its insurance products allow customers to pay monthly, quarterly, half-yearly or annually.
Alliance Insurance, CBZ and Nyaradzo life assurance similarly advertises monthly, quarterly, half-yearly and annual payment options. But, the question is whether such arrangements are sufficiently available across the market and whether they are actually helping customers maintain cover.
Nyazema says flexible payments can help consumers manage insurance alongside irregular incomes, but spreading an annual premium over smaller instalments does not necessarily make insurance cheaper.
Microinsurance solutions
The issue is particularly significant for Zimbabwe’s small businesses. The regulator has identified micro, small and medium-sized enterprises as a potential market for micro insurance, but many such businesses operate with limited cash reserves and face multiple financial pressures.
In December 2025 IPEC said that the 2026 national budget had prioritised strengthening the country’s micro-insurance framework. The regulator cited estimates that at least 70% of Zimbabwe’s population was uninsured.
The government said the micro-insurance framework was intended to encourage products tailored to low-income households and micro, small and medium-sized enterprises. IPEC supported the idea, saying such products could provide protection against risks including illness, death, property loss and crop failure.
To incentivise digital micro-products, IPEC launched an official Regulatory Sandbox in May this year. The cohort two window application closed at the end of August. The sandbox creates an enabling environment for responsible innovation in the insurance and pensions sector.
Looking east, the experience of Kenya offers one possible comparison. Research published by the Association on Kenya’s Insurers micro-insurance market found that products designed around customers’ cash flows can improve accessibility.
The Association of Kenya Insurers (AKI) identified flexible payment terms, affordable premiums, simpler products and digital distribution as factors that can improve access to micro insurance.
An AKI survey showed micro-insurance products in Kenya grew to over 55 types, up from 32 in 2015. Health insurance, personal accident covers and funeral policies lead consumer demand. AKI emphasises that micro insurance thrives when insurers collaborate with non-traditional players, social groups, digital tech platforms and the government.
Zimbabwean insurers are already experimenting with smaller products and different payment arrangements.
“The question is whether similar models can be expanded into short-term insurance products covering areas such as motor, property and small-business risks. The decline in policies also raises questions about how insurers define and measure their customer base,” said Nyazema.
Maguraushe said digital technology may offer another route. Mobile money and digital payment platforms could allow insurers to collect smaller premiums more frequently and reduce some distribution costs. But he acknowledges that technology alone will not solve an affordability problem.
“If the underlying product is too expensive or does not meet a customer’s needs, allowing payments through a mobile phone is unlikely to prevent a policy from lapsing. The Kenyan experience has similarly highlighted digital distribution alongside flexible pricing and product design rather than treating technology as a standalone solution.”