Insurance must drive economic transformation: Mnangagwa

PHILLIMON MHLANGA IN VICTORIA FALLS

Deputy Finance Minister Kudakwashe Mnangagwa yesterday warned that African economies can no longer rely on “outdated, traditional insurance models,” insisting the sector must now be both the stabiliser of national economies and a catalyst for the continent’s economic transformation.

Speaking at the Insurance Institute of Zimbabwe’s Southern Africa Insurance Indaba in Victoria Falls, Mnangagwa urged insurers and regulators to “redefine the societal role of insurance and close the vast protection gap,” arguing that a modern, trustworthy, and well-capitalised insurance industry is now a strategic necessity for achieving Zimbabwe’s Vision 2030, the African Union’s Agenda 2063, and the UN Sustainable Development Goals.

He said Africa has reached a defining crossroads where economic ambitions, climate pressures, and rising social vulnerabilities are colliding, exposing longstanding weaknesses in risk markets that have struggled with low penetration, fragile capacity, and deep public mistrust. Insurance, he said, remains the unseen force that steadies economies, yet remains dramatically underleveraged.

“Insurance is like that quiet friend always in the terraces, never shows up, but when things go wrong, they’re the one who saves the day. It turns chaos into calm and uncertainty into opportunity,” he said.

Mnangagwa warned that Africa’s protection gap — among the world’s largest — continues to leave farmers, small businesses, and urban entrepreneurs dangerously exposed to economic and climate shocks. No country, he noted, can industrialise or attract patient capital while leaving its population uninsured.

“Insurance must serve not only the wealthy and connected but also the farmer in rural areas, the vendors and the young entrepreneurs in urban areas,” he said.

He argued that Africa requires a fundamental shift from legacy systems that are urban-centric, exclusionary, and overly dependent on foreign reinsurers. Instead, insurance must be rebuilt as a development institution capable of mobilising long-term savings, strengthening resilience, and supporting investment.

“We cannot rely on traditional insurance models. A paradigm shift is imperative,” he said.
“As Government, we recognise that a robust insurance sector is both a stabiliser and a catalyst for economic transformation.”

Mnangagwa said the world’s upper-middle-income economies thrive on what he termed the “financial triad of insurance, banking and commerce,” institutions that enable nations to safeguard wealth, expand credit, and drive sustainable growth. Closing Africa’s protection gap, he added, is not theoretical — it is central to economic stability and structural transformation.

He reminded delegates that insurance supports at least nine of the 17 SDGs, not only by managing risk but by channelling capital into industries, infrastructure, and communities.
“Today (yesterday), we must reimagine insurance, not merely as a business enterprise, but as a strategic development partner and a powerful enabler of sustainable growth across Africa,” he said.

Climate change, he noted, has already reshaped risk in agriculture, mining, tourism, and construction, sectors that sit at the heart of many African economies. Outdated models, he said, cannot continue absorbing escalating volatility.

Unless Africa re-engineers its risk architecture, he warned, the continent risks remaining trapped “in an endless loop of reaction and recovery.”

He urged insurers to rebuild public trust through transparent conduct and fair claims processes, warning that a weak insurance sector leaves economies fragile and uncompetitive.

“A robust insurance sector drives economic growth and secures our future; its decline, however, risks stalling the very momentum of development,” he said.
“Together, let us champion this vital industry as a catalyst for prosperity and a safeguard for generations to come.”

Zimbabwe’s structural weaknesses remain severe.
In remarks delivered on behalf of Insurance and Pensions Commission (IPEC) Commissioner General Grace Muradzika, by director of insurance Sibongile Siwela, described penetration levels of 1.06%, compared with a regional average of 35%, as “worryingly low.” Limited retention capacity, she said, continues to push premiums offshore, draining long-term capital needed for infrastructure, industrialisation, and climate adaptation.

She pointed to climate risk, economic volatility, and fragile public confidence as entrenched obstacles undermining growth.
“Let us grow our insurance market to ensure we can compete on the global market,” she said.

Insurance Institute of Zimbabwe president Clementine Chinyuku said the sector stands “at a pivotal moment,” warning that incremental reform will no longer suffice.

“The insurance sector across Africa stands at a pivotal moment, balancing between traditional practices and the imperative for transformation,” she said.
“The decisions we make now will be crucial in determining whether our industry adopts a reactive stance or evolves into a proactive catalyst for sustainable economic development.”

Chinyuku called for a shift from exclusion to inclusion, from complex processes to simple, customer-centric offerings, and from narrow protection to the empowerment of communities. She stressed the need for solutions relevant to smallholder farmers, informal traders, emerging entrepreneurs, and climate-exposed populations.

She said Africa’s future growth will increasingly depend on the African Continental Free Trade Area, the rise of InsurTech, and a young digital population that expects seamless, low-cost financial services. Insurance, she argued, must also be understood as a source of development capital.

“Reimagining the insurance paradigm necessitates the unlocking of economic potential. It requires reframing insurance from a mere expenditure to a vital capital resource for development,” she said.