WHEN Cabinet approved principles for a new road accident fund (RAF) in October, it triggered one of the most far-reaching shifts to Zimbabwe’s post-crash care system in decades.
The reform is as ambitious as it is overdue: a no-fault fund that guarantees every road accident victim — driver, passenger or pedestrian — immediate medical attention, rehabilitation support or dignified funeral assistance.
It is designed to end the slow-moving bureaucracy that has long defined accident response, where delays in evacuation, treatment and compensation have routinely turned survivable crashes into fatalities.
For policymakers, the RAF represents the bold, humane intervention the country has lacked, a system that finally acknowledges the value of rapid, universal care.
Financed through motor insurance premiums and Treasury allocations, the fund aims to plug the fatal gaps in the current framework and build a modern, life-saving response structure.
Public consultations will stretch into late 2025, but government energy behind the reform is unmistakable.
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Yet beneath the surface of this optimism, unease is tightening its grip on the insurance sector. What looks like a victory for public safety has become, for insurers, a looming existential dilemma.
At the recent Southern Africa Insurance Indaba, the RAF overshadowed almost every other issue, reflecting deep anxiety within a short-term insurance industry already battling liquidity challenges and the strain of prescribed assets.
Alice Shumba, vice-president of the Insurance Council of Zimbabwe, articulated the sector’s fears with a rare bluntness.
“I take it that you also noted from madam (Insurance and Pensions Commissions (Ipec) director insurance and micro-insurance) Siwela’s comment on the financial soundness for the short-term industry, which is a bit on the low side,” Shumba said.
“We take opportunity to express where we see issues that may also affect the industry. And the road accident fund is one such, where we feel that with the financial soundness that is low, and we assess with the road accident fund, yes, there is co-existence, but there is also an existential threat for some of the members.
“Coupled with that, there are liquidity challenges that we are facing in the market. And the majority of insurance companies are invested in prescribed assets, and predominantly treasury bills. That is also contributing to liquidity issues for insurance companies,” she added.
Shumba said the industry has raised these fears before, but the scale of the proposed reform requires deeper and more frequent engagement.
The regulator, the Insurance and Pensions Commission (Ipec), has also made no effort to soften its message. Its director, Sibongile Siwela, warned that the RAF’s design — drawing contributions from insured motorists to support uninsured victims — risks creating a perverse incentive.
“I think the road accident fund will affect the insurance industry. And there have been so many engagements on this. It will impact the insurance industry, especially the short-term because there will be a fund set up,” Siwela said.
“It will be that anyone who has taken insurance will pay for those people who don't have insurance. Even people may actually decide, now that there’s a road accident fund, why do I need to take a policy?
“The fund is meant to assist accident victims, which is fine, but they’re taking the premium from the short-term. The intention is to take the premium from the short-term insurance,” she said.
Siwela noted that other countries have chosen more sustainable models, such as funding the RAF through fuel levies — a portion of every litre sold — rather than cannibalising the insurance premium pool.
She warned that under the current proposal, the industry’s operational viability is at stake.
“There are many problems that we're trying to fix. This will destroy or impact the insurance industry negatively,” Siwela said.
“It will definitely affect the insurance industry in terms of living, even in terms of paying claims.
“Even if they decide that people pay an extra amount, it’s impossible because if they take 35%, there are other deductions made from the premium, the dollar premium.
“You then use the remaining to administer the business, to pay claims. But they’re not paying claims, but they’re taking a percentage, almost 34%, from the premium risking your own industry,” she said.
Siwela said South Africa and Namibia have both struggled with similar funds, offering a cautionary tale for Zimbabwe.
Deputy Finance, Economic Development and Investment Promotion minister David Mnangagwa did not dismiss the concerns, but he challenged the industry to present its case more clearly and with evidence that policymakers cannot ignore.
“Alice makes a submission about the road accident fund. So these have been made before. So, I haven’t seen them,” Mnangagwa said.
“I know there are different platforms, probably more with the Traffic Safety Council and the minister of Transport, not so much the minister of Finance.”
He questioned whether the industry had clearly demonstrated what would happen if its exposure to the RAF rose significantly, whether companies would remain stable, begin to limp, or collapse entirely.
“And why the minister of Finance becomes your biggest advocate is when we speak to the microeconomic stability, we’re also talking to the financial soundness of all industries,” Mnangagwa said.
“If most insurers move to a 60% to 80% exposure to the road accident fund, what does it mean for the industry? Does it collapse? Does it start limping? Will there be enough products available to be able to continue being called insurance companies?
“Again, these are submissions that are supposed to be graphically put to make sure that policymakers understand the full extent of this policy implementation,” he added.
Mnangagwa cautioned that if insurers believe the RAF could destabilise the market, they must communicate this with urgency.
“Because there was not any prevalence of pushing for a policy that can collapse an entire ecosystem. But sometimes it can happen when the voices are not loud enough,” he said.
“When the people and industry believe that the government is not listening, you realise that there’s a clarity that is coming. But you haven’t sounded the alarm loud enough to allow government to hear.
“And next thing is no insurance industry. So, I mean, it’s quite important that we have the numbers, the figures, line by line on how this affects the industry in general,” Mnangagwa told the sector.
Amid the heated debate, the Actuarial Society of Zimbabwe offered a longer-term, more measured analysis.
President Prosper Matiashe noted that while insurers may lose a portion of their motor premiums, they could also benefit from reduced claims over time as the RAF absorbs medical and funeral expenses traditionally covered by comprehensive policies.
“With the RAF absorbing injury-related benefits and medical care costs, some duplication of cover may arise between traditional motor insurance and the new fund,” he said.
“To manage this, insurers will likely need to revise policy wording to clarify that their cover is restricted mainly to property damage. Related add-ons such as medical or funeral riders currently embedded within comprehensive policies may have to be removed or redesigned to avoid overlap.”
Matiashe said better emergency care funded through the RAF could reduce fatalities and medical costs, gradually improving affordability.
But he emphasised that sustainability will depend heavily on how government manages the split between insurer-retained premiums and contributions ceded to the fund.
Elsewhere in the world, governments grappling with similar dilemmas have experimented with reforms aimed at improving transparency and efficiency.
Some have launched contact centres that allow victims to track claims without intermediaries.
Others have rolled out public rights-awareness campaigns or proposed allowing individuals to file claims independently to reduce delays.
Several countries have piloted cashless emergency treatment schemes to guarantee life-saving intervention in the first hours after a crash.
Zimbabwe now finds itself wrestling with the same balancing act that has tested other nations: How to save more lives without collapsing a critical pillar of the financial sector.
Policymakers want universal protection. Insurers want viability. Regulators want stability. Actuaries want coherence. And in the centre of it all are millions of road users, the very people this fund is meant to protect.
As consultations unfold, one truth is clear: the RAF will reshape Zimbabwe’s accident response system and redefine the insurance landscape for years to come.
Whether it becomes a landmark life-saving reform or an unintended trigger for sectoral upheaval will depend on the choices made in the months ahead. These choices must balance compassion with caution, and public good with economic stability.