THE Insurance and Pensions Commission (Ipec) has withdrawn all life insurance products from the market, directing insurers to re-register them only after proving they are thoroughly developed in an initiative meant to improve product relevance and boost sector growth.
Amid concerns over the continued dominance of funeral products in the life sector, the commission now requires insurers to rethink their offerings and assure the regulator they can deliver on them effectively.
Over the years, life assurance products have been failing to captivate policy holders, with the funeral assurance business becoming the backbone of the sector.
On the sidelines of the regulator’s seventh annual general meeting in Harare last week, Ipec commissioner Grace Muradzikwa said the process was meant to clean up the current product offering.
“We have recalled all life products, and the re registration process is underway. We’re cleaning up the product offerings,” Muradzikwa said.
“Insurers won’t be allowed to sell any product without reapplying and securing approval.
“Ipec is rolling out a new product approval process requiring all products to be resubmitted for authorisation. You cannot market a product we haven’t approved.”
Life assurance is a crucial component of financial planning and security, providing individuals with the assurance that their loved ones will be protected and financially supported in the event of their untimely demise.
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Traditional life insurance products include term assurance, endowment policies, pure endowment and whole life.
With funeral and group life assurance generating 87% of life business in Q1 2025, the regulator has warned that continued over-reliance on funeral products may undermine the sector’s long-term growth prospects.
The Ipec Q1 report shows the life assurance sector logged 12,121 not taken up (NTU) policies, with projected premiums totalling ZiG85.43 million (US$3.23 million).
Muradzikwa said the move was key to ensure that the industry stops from mis-selling and continued to sell a product which it wont deliver on.
Muradzikwa said this meant that life players won’t be sell products that haven’t been approved by the regulator.
Over the years, regulator has also noted that the decrease in the number of agents was pointing to the shrinkage of life business in the market.
The sector is facing challenges in generating new life business and the commission has been engaging the industry and other key stakeholders to explore ways of revitalising the sector.
Muradzikwa said upon re-registering the product the insurers must demonstrate that they have thought through their products and can actually deliver on them.
“Too often, providers blame the macroeconomic environment or the state of the economy when they fail to honour commitments,” she said.
“It’s time to be realistic and design products you can actually sustain. If you promise that a premium paid today will yield a benefit in 10 years, you must ensure you can deliver it, rather than continuing to collect money for products you know are unviable.
“That’s why we have recalled all products and require you to reapply.”
According to the Q1 report, Ipec received 19 complaints. Of these, six were related to life assurance while 13 related to funeral insurance with the major sources of the complaints being claim repudiation and low value of benefits.
Muradzikwa said continued complaints also spoke to the type of products on offer stressing that dominance of funeral product in the life business remained of concern.
“We are concerned about the concentration of life business and funeral.Funeral seems to be the growth area,” she said.
“Everybody’s now going into funeral insurance. We challenging the industry to come up with relevant product, to diversify their product offering so that everyone is not just chasing funeral
“We know, we understand why, because I guess when you die, they are providing a defined benefit.
“They are burying people, and people can see that product. But I think there is room for us to also come up with products that policyholders can speak to.”
Previous Ipec reports have focused on the need for the industry to embrace changes in technology, foster innovation and focus more on customer experience and embrace diversity.
They have also recognised that the funeral assurance business has become the backbone of the life insurance sector, generating 73% of the insurance revenue in 2023.
Funeral assurance and group life assurance remain the revenue drivers for the life insurance sector.
The dominant life insurance providers in Zimbabwe by asset distribution are Old Mutual, Nyaradzo Life and First Mutual Lfe, whose combined share is almost three quarters of the sector’s total assets.
Zimbabwe’s insurance companies, like those in other sectors, have borne the brunt of the country’s long running economic problems characterised by hyperinflation and currency volatility.
Ipec is a statutory body mandated to regulate, supervise and develop the insurance pensions industry, for the protection of policyholders and pension scheme members in Zimbabwe.
