Short-term insurer Alliance Insurance has appealed against a High Court order compelling it to pay textiles giant Paramount Exports nearly US$11,7 million for stock destroyed in a devastating 2023 fire, arguing the payout would “impoverish” the company and threaten its financial stability.
This week, Alliance declined to comment, citing ongoing court proceedings. But the dispute, now before the courts, has reignited concerns over the insurance sector’s capacity to underwrite major commercial risks.
Paramount’s Harare factory went up in smoke in December 2023, wiping out assets estimated at about US$25 million.
An arbitrator awarded the clothing manufacturer nearly US$11,7 million in December last year, covering unpaid claims for stock, equipment and inventory destroyed in the blaze.
In a separate High Court order issued in February, Alliance was also directed to rebuild Paramount’s burnt-out factory, Paramount said this week. A Paramount official said the insurer had moved to overturn the arbitration ruling.
“Following an intensive arbitration process, an award was made on 10th December 2025, on our stock loss claim for Alliance to pay Paramount US$11,7 million.
“Alliance have applied to the High Court to have the award set aside,” Paramount director Jeremy Youmans told businessDigest.
“According to an affidavit filed by Alliance CEO, Brian Chirema, under case No: HCHC 155/26, the award is contrary to public policy of Zimbabwe in that its substantive effect will impoverish the applicant (Alliance).” Youmans said Alliance’s affidavit relied on a circular from the Insurance and Pensions Commission (Ipec), which showed the insurer’s statutory reserve stood at US$1,5 million.
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“It further argues that if this award is allowed to stand, it will ‘economically negatively affect’ the applicant,” he said.
The dispute dates back to early 2024, when Paramount said Alliance had accepted liability for the losses.
In February 2025, Paramount disclosed plans to sue the insurer for allegedly failing to honour commitments to rebuild the factory. Youmans said a separate partial award disputed by Alliance had later been settled through a court agreement, resulting in Paramount receiving US$4 million.
“Again, it is all there in the court papers, but we lost our building on 4th December 2023. That award was made on 4th February 2026. There have been a few visits of representatives of Alliance, but no testing has started nor any drawings agreed yet,” he said.
“These then have to be approved by the City of Harare. If there is no money to pay the full award for the stock, how will they rebuild a three-storey, 8 000m² building? It is a very concerning situation.”
The short-term insurance report for the quarter-ended September 30, 2025, showed Alliance’s capital position rising to US$13,46 million from US$6,31 million a year earlier.
The insurer posted a profit after tax of ZiG116,82 million on insurance revenue of ZiG710,88 million during the nine-month period. That compared with insurance revenue of ZiG343,84 million and profit after tax of ZiG47,03 million recorded in the comparable period in 2024.
Ipec reported that Alliance held a 12% share of Zimbabwe’s short-term insurance market in foreign-currency-denominated insurance revenue by the third quarter of last year. Contacted for comment, Chirema declined to discuss details of the dispute.
“I am sure you are aware that the matter is before the courts. As a responsible insurer, we respect the judicial process and confidentiality of client policy information.
“At this point we cannot engage in public commentary on matters that are subjudice. We are committed to allowing the judicial process to run its course,” he said. Ipec public relations manager Lloyd Gumbo also declined to comment directly on the matter.
“Since the matter referenced was dealt with by the courts, it would not be appropriate for the commission to comment on this specific case,” Gumbo said.
He, however, said Ipec was strengthening oversight, enforcement and consumer protection measures across the insurance sector to improve the timely settlement of claims and boost public confidence, while ensuring regulated entities comply with industry rules.
