FOREIGN currency business contributed US$64,85 million, or 80% of Zimbabwe’s US$81,33 million short-term insurance revenue during the first quarter of 2026, highlighting the industry’s overwhelming reliance on US dollar transactions, a new first quarter report shows.
According to the Insurance and Pensions Commission (Ipec), the first quarter’s short term insurance foreign currency business generated US$64,85 million out of the sector’s total US$81,33 million revenue in the first quarter.
This highlights insurers’ dependence on US dollar cash flows to fund underwriting activities and meet claims obligations.
“Direct insurers had 769 625 policies as at 31 March 2026, an 8% decrease from 838 092 policies reported as at 31 December 2025.
“The net decrease was attributable to 264 495 exits and 196 028 new policies reported during the period under review,” Ipec said in its first quarter Short Term Insurance Report 2026.
“Direct insurance companies (short-term insurers and microinsurers) reported insurance revenue amounting to ZiG2,08 billion, equivalent to US$81,33 million.
“Of this amount, foreign currency-denominated business amounted to US$64,85 million, accounting for 80% of insurance revenue.”
Ipec said direct insurance brokers reported consolidated gross premium written of ZiG1,44 billion, equivalent to US$56 million, of which US$55,4 million (99%) was foreign currency-denominated business.
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The foreign currency short term insurance revenue was up 15% from the comparative 2025 period.
“USD-denominated business accounted for 80% of total insurance revenue, reinforcing the sector’s structural reliance on foreign-currency cash flows for underwriting and claims settlement capacity,” Ipec said.
“This reliance highlights the importance of foreign exchange stability and currency management strategies for maintaining financial resilience within the industry.”
According to the report, in terms of business mix and concentration (USD lines), this was motor (US$26,72 million; 43%) and fire (US$11,31 million; 18%) together representing 61% of the US dollar insurance revenue.
“The top five USD classes — motor (43%), fire (18%), personal accident (10%), farming (8%), and engineering (8%) — collectively contribute about 87% of total USD revenue, indicating limited diversification across the remaining lines,” Ipec said.
Old Mutual, Cell, Alliance, Nicoz Diamond and Zimnat Insurance dominated the market with a combined market share of 75% in terms of foreign-currency-denominated insurance revenue.
“This dominant position underscores their strong market presence and considerable influence within the insurance industry,” Ipec said.
However, in terms of reinsurance, foreign currency-denominated revenue fell 8% to US$39,06 million during the quarter, although 96% of all reinsurance business continued to be underwritten in foreign currency.
In light of the foreign currency business, Ipec called on the industry to:
“Strengthen liquidity management frameworks, including weekly cash-flow forecasting and stress testing; Maintain higher USD liquidity buffers to support claims in foreign currency; Improve premium collection processes, particularly for brokers and agents, to reduce receivables-driven liquidity pressure; Align prescribed asset holdings with liability duration to minimise ALM mismatch; Reassess reinsurance structures to ensure sustainable retention levels.”
Meanwhile, regulatory focus will be on intensifying supervision of insurers with persistently negative working capital and repeated delays in claims settlement.
Other regulatory areas of focus include:
“Conducting quarterly reviews of liquidity ratios, reinsurance recoverable ageing, and Prescribed Asset compliance; Evaluating insurers’ asset quality as prescribed in S.I. 95 of 2017 to ensure only admissible assets support capital and liquidity buffers; Increasing supervisory focus on insurers with rapid growth in liabilities, but declining reinsurance protection.”
