Govt moves to rebuild trust in insurance sector
STAFF WRITER
Government has intensified efforts to rebuild confidence in Zimbabwe’s insurance and pensions sector, Finance, Economic Development and Investment Promotion Deputy Minister Kuda Mnangagwa has said.
The renewed push comes after pensioners and policyholders lost more than US$3bn in savings during the hyperinflationary period between 2006 and 2009, when pensions, insurance policies and long-term savings were effectively wiped out.
Speaking at the Insurance and Pensions Commission (IPEC)’s 20th anniversary cocktail last Friday in Harare, Mnangagwa acknowledged the scale of the damage inflicted on household wealth but said Government was now working closely with the insurance sector regulator IPEC and industry players to restore confidence in long-term financial contracts.
“It must be acknowledged that the legacy issues arising from past value erosion remain complex and deeply entrenched. Rebuilding trust in long-term financial contracts is neither quick nor easy,” Mnangagwa said.
“What is encouraging, however, is that IPEC has approached these challenges with professional integrity, transparency, and pragmatism, designing well-informed interventions aimed at improving benefit adequacy, strengthening governance, and enhancing disclosures to policyholders and pension fund members.”
Mnangagwa said Government fully recognises the progress made so far and remains committed to addressing historical constraints while strengthening the sector’s foundations.
“The next chapter for IPEC must continue to focus on consolidating past reforms, deepening technical excellence, rebuilding public trust; and ensuring that insurance and pensions once again serve as reliable vehicles for protection, savings, and dignity in retirement,” he said.
“Government stands ready to continue working hand-in-hand with IPEC and all stakeholders to achieve these objectives.”
Confidence in the insurance and pensions sector was severely undermined following the 2009 dollarisation, which the Justice George Smith-led Commission of Inquiry into the conversion of insurance and pensions values found had wiped out more than US$3 billion in household wealth.
For many Zimbabweans, the trauma of the 2008 hyperinflation remains raw. Bank balances vanished almost overnight. Pensioners who had contributed faithfully for decades saw their nest eggs reduced to worthless paper when the Zimbabwe dollar was abandoned in favour of a multi-currency system dominated by the US dollar.
They were left destitute.
The Smith Commission found that the conversion of Zimbabwe dollar balances into foreign currency was opaque, inconsistent and devastating, with pensioners receiving paltry sums that were insufficient to meet basic living costs.
That legacy entrenched deep distrust in formal savings institutions, a challenge the Government says it is now determined to reverse.
