Industry must own up to past mistakes to rebuild trust: First Mutual boss
SAMANTHA MADE
First Mutual Holdings Limited chief executive Douglas Hoto has urged the insurance industry to own up to past mistakes if it hopes to rebuild trust in long-term insurance products.
He said the sector’s credibility was shattered by the mismanagement of pension funds, which wiped out value for many policyholders.
“In our industry in particular, first of all, I want to clarify that it’s not that there’s a lack of insurance in Zimbabwe. There’s a lack of trust in long-term insurance. It’s quite important for people to understand that position,” Hoto said.
Hoto attributed this deep-seated mistrust to the painful legacy of past experiences, particularly the mismanagement of pension funds and the massive erosion of value suffered by ordinary policyholders. Many Zimbabweans lost their pensions and savings during periods of economic turbulence, leaving them skeptical of any promises tied to the future.
“So my first conclusion is that as the Zimbabwean government, industry players, and account holders, we have not accepted what went wrong, in that the fund was mismanaged, and it went badly, and value was lost. This is why we have spent 10 years talking about compensation, which will never come,” he said.
His remarks cut to the heart of a long-running issue: the gap between financial institutions and ordinary citizens who feel betrayed by a system they once trusted to safeguard their livelihoods.
For Hoto, rebuilding credibility begins with honesty.
He argues that the industry cannot pretend the past never happened or paper over the cracks with new regulations and product launches.
“We must look in the mirror and accept what went wrong. We need to acknowledge that value was lost, and it’s not just about compensation, which may never come,” Hoto said.
This frank assessment reflects a growing recognition within the sector that denial is no longer an option. Without addressing the pain of past losses, industry players risk alienating future generations of potential policyholders.
The collapse of value in pensions and long-term insurance had devastating consequences for retirees, workers, and families. Teachers, nurses, factory workers, and civil servants who had contributed faithfully to pension funds found themselves destitute when hyperinflation wiped out their savings. For many, the sense of betrayal runs deep, and trust in financial institutions has never fully recovered.
Hoto acknowledged this reality, pointing to the need for the industry to reconnect directly with those who lost the most.
“We need to actually face that. Once we’ve done that, we must go and say to our stakeholders, because insurance is a game of numbers, banking is a game of numbers, those small people who are at the bottom of the pyramid, who lost their money, are the ones we must go and talk to about trust,” he said.
While there has been talk of compensation schemes over the past decade, Hoto admitted that these discussions often fail to deliver tangible outcomes. For him, focusing solely on compensation risks distracting from the deeper need to reform the industry and restore credibility.
He warned that waiting endlessly for payouts that may never materialize is not a viable solution. Instead, the sector should focus on building a culture of accountability and transparency that ensures such losses never happen again.
Hoto emphasized that transparency and accountability are the cornerstones of any effort to restore public trust. Insurers, he said, must learn from past mistakes, admit where they failed, and commit to higher standards of governance going forward.
The group believes that regulators and industry players must collaborate more effectively to promote long-term insurance products that deliver real value for policyholders. Without this shift, confidence in the sector will remain fragile.
The Insurance and Pensions Commission (IPEC), Zimbabwe’s industry regulator, has introduced several reforms in recent years to strengthen governance and improve oversight.
Among these are stricter reporting requirements, tighter risk management frameworks, and moves towards electronic supervision systems designed to detect weaknesses early.
But analysts suggested that technical reforms alone will not rebuild confidence. True reform, he said, requires cultural change within the industry, where both companies and regulators prioritize the interests of policyholders above all else.
The erosion of trust is not confined to insurance.
Zimbabwe’s wider financial services sector, including banks, has also battled credibility issues following years of policy instability, currency volatility, and loss of savings.
For many citizens, the instinct is now to hold hard assets like property, livestock, or U.S. dollars rather than rely on long-term financial instruments.
This culture of financial insecurity presents a significant barrier to the growth of long-term insurance. Reversing it will require insurers to prove, through consistent performance and openness, that they can once again be trusted custodians of people’s futures.
The analysts argued that the rebuilding process will not be quick but must begin with small, deliberate steps. Companies should focus on grassroots engagement, listening to policyholders, and demonstrating that lessons have been learned.
Industry observers say this approach could help insurers differentiate themselves in a market where skepticism runs high. By engaging directly with communities and being upfront about the past, companies can gradually rebuild relationships that were shattered by years of financial turmoil.
For Hoto, the future of long-term insurance in Zimbabwe rests not on clever product design or aggressive marketing but on rebuilding trust from the ground up. Acknowledging mistakes, being accountable, and putting policyholders at the center of the conversation are, in his view, non-negotiable.
The insurance industry, he insisted, cannot afford to ignore its history. Only by owning up to past failures can it lay the foundation for a stable, sustainable future.
