FRUSTRATED Zimbabwean insurance executives are pushing for measures to ensure they tap into opportunities brought by foreign investors, as they raised concerns over loopholes allowing these giants to rely on cover arranged in their home countries.
This was a major talking point during the just ended Southern Africa Insurance Indaba in Victoria Falls, where delegates pressed the Zimbabwe Investment Development Agency (Zida) to disclose whether it had mechanisms to ensure local insurers tap into the business.
According to the United Nations Conference on Trade and Development, Zimbabwe’s foreign direct investment inflows were US$280 million in 2019 and US$194 million in 2020.
The figures rose to US$250 million in 2021, US$395 million in 2022, US$635 million in 2023 and US$597 million in 2024. Local insurers say these inflows should translate into meaningful opportunities for the domestic industry.
“Then, my issue is on the insurance that comes packaged with these investors from offshore,” one delegate said.
“We have raised this several times. It is a pain point for the industry. We recommend as an industry that probably, as you (Zida) license these investors, you give them a certain quota of the insurance requirements that they have to be covered locally.
“Of course, we may not have the capacity to cover everything, but if a certain quota is allocated to the local market, we should be able to put our capacity together as an industry and give the cover that is required.”
Another delegate questioned the heavy reliance on foreign insurers.
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“I’m sure a lot of the investors are probably looking at their home insurers to make them safe. In other words, they are not looking at our insurance sector,” the delegate said.
“They are more uniquely looking at their own insurance agents back in the UK or America or China."
Zida chief executive officer Tafadzwa Chinamo said insurance was among the first services investors enquire about when entering Zimbabwe.
“Investors naturally start with insurance from their home countries. If I am raising capital from abroad, I will use my familiar insurers to secure my investments before even considering local options,” he said.
He acknowledged that this approach leaves local insurers largely side-lined, but advised the sector to work together.
“There is a serious opportunity here for collaboration. Once a company starts operating in Zimbabwe, it will interact with local laws, loans and other requirements,” he said.
“This is where local insurers can provide value, either as primary cover providers or in a complementary role.”
Chinamo added that many foreign investors operate on assumptions about Zimbabwean risks that, though not always accurate, may discourage them from engaging local insurance firms.
“Many investors also bring their own capital rather than borrowing (here), so there is room for local insurance to step in, even if only as part of a layered coverage approach,” he said.
He suggested that policy measures could be introduced to encourage greater participation by domestic insurers.
On the sidelines of the event, Old Mutual Life Assurance Company Zimbabwe general manager Linda Mariwande said local insurers wre facing structural disadvantages.
“Sometimes we cannot compete with global insurers because they have larger pools, better risk spreads, and sophisticated pricing,” she said.
“But we can provide primary coverage, and anything beyond our capacity can be retroceded or reinsured. The point is, we need a chance to take the first layer of the risk.”
Mariwande stressed that local insurers were capable of handling initial coverage layers, but need regulatory support to secure a share of the market.
“There are always layers in insurance. What we want is to participate in the base layer, which is entirely possible,” she said.
She warned that unless mechanisms are put in place, a substantial portion of potential business will continue to leave the country.
