Zimbabwe's life assurance sector is experiencing a surge in revenue, but storm clouds are gathering. The industry is navigating a complex landscape of rapid growth, structural weaknesses, and regulatory challenges, according to the latest report from the Insurance and Pensions Commission (IPEC). Let's dive in.
For the nine months leading up to September 2025, the life assurance sector saw a significant boost, with insurance revenue climbing to ZWG4.59 billion, which translates to approximately US$172.05 million. This marks a substantial 39% increase compared to the US$123.77 million recorded in the same period of 2024.
But here's where it gets controversial... Despite this growth, the sector is heavily reliant on a few key products and players, raising concerns about market concentration and consumer protection. A significant portion of the revenue, 55%, was generated in foreign currency. However, this is a 7% decrease from the previous period, primarily due to exchange rate stability.
Furthermore, the report highlights that funeral assurance and group life assurance are the primary income drivers, accounting for a staggering 82% of the total revenue. This dominance is reshaping the market share of traditional life assurance products. IPEC noted a shift towards renewable annual policies, particularly in funeral and group life assurance. This practice raises regulatory eyebrows, especially concerning policyholder protection under the Funeral Directive. The industry is thus strongly encouraged to adhere strictly to the rules set out in the Funeral Directive.
Nyaradzo Life Assurance Company leads the pack with a 39.27% market share, largely fueled by its funeral assurance policies. The top five companies collectively hold 84% of the sector's total revenue, indicating a moderately concentrated market. The product mix remains narrow, with traditional long-term products losing ground. Funeral assurance alone represents 68.04% of the total revenue, followed by group life assurance at 14.27%.
And this is the part most people miss... The regulator is deeply concerned about the high number of policies that are sold but never activated by customers. During the quarter, 19,493 policies went unactivated, resulting in a loss of projected revenue of ZWG4.67 million. Companies like Econet Life, Doves Life, Zimnat Life, Fidelity Life, and Old Mutual Life are urged to investigate the root causes of their high 'Not Taken Up' (NTU) rates. IPEC also warns against misrepresentation by agents.
Adding to the industry's woes is the persistent issue of policy lapses. The sector began the third quarter with 2,122,824 active policies, but 97,111 lapsed, resulting in a lapse ratio of 4.57%. Affordability issues and changes in policyholders' circumstances are the main culprits. Nhaka Life stands out with an alarmingly high lapse ratio of 27.59% and is urged to take immediate action.
In conclusion, the report suggests that the sector's over-reliance on funeral assurance is unsustainable for long-term growth. Strategic innovation and diversification are crucial to rebuilding public trust and ensuring the industry's future.
What do you think? Is the focus on funeral policies a sustainable model for the long term? Share your thoughts in the comments below!
