Insurance must serve more than the privileged few
Yesterday, Deputy Finance Minister Kudakwashe Mnangagwa warned that African economies can no longer rely on outdated, traditional insurance models. Speaking at the Southern Africa Insurance Indaba in Victoria Falls, he made clear that insurance must evolve beyond serving the privileged few and become both a stabiliser of national economies and a catalyst for the continent’s economic transformation.
For too long, insurance in Africa has been treated as a niche service for the wealthy and connected, while millions of farmers, informal traders, and young entrepreneurs remain dangerously exposed to economic shocks and climate risks. Mnangagwa’s call is a timely reminder that inclusion is no longer optional—it is a strategic imperative.
Africa stands at a critical crossroads. Economic ambitions, social vulnerabilities, and climate pressures converge with fragile financial systems to expose deep weaknesses in risk markets. Low insurance penetration, overreliance on foreign reinsurers, and public mistrust have left the continent’s protection gap among the world’s largest. As Mnangagwa emphasised, no country can industrialise, attract patient capital, or build resilient economies while leaving the majority of its population uninsured. Insurance must be reframed not as a luxury for the elite but as an essential development tool, reaching rural farmers, informal workers, urban entrepreneurs, and all those whose livelihoods underpin economic growth.
Mnangagwa’s metaphor of insurance as the “quiet friend” who appears in times of crisis underscores the sector’s unseen but vital role. A robust insurance system steadies economies, safeguards wealth, and enables credit markets to function, yet its stabilising power often goes unrecognised until disaster strikes. Countries across Asia and Latin America illustrate the transformative potential of well-capitalised insurance industries: long-term savings fund infrastructure, industrialisation, and diversification. Africa cannot afford to lag while its latent insurance potential remains untapped.
Reimagining insurance requires more than incremental reform; it demands a paradigm shift. Legacy models, often urban-centric and reactive, are ill-suited to absorb escalating climate risks or support Africa’s ambitious economic agenda. Insurance must become a development institution that mobilises capital, strengthens resilience, and drives investment in communities and industries. It must shift from merely managing risk to actively shaping markets, financing critical infrastructure, and enabling adaptation to climate change.
Zimbabwe’s current insurance penetration of just 1.06%, compared with a regional average of 35%, highlights the scale of the challenge. Premiums leaving the country to foreign markets are lost opportunities to fund domestic growth. Limited retention capacity and fragile public trust undermine economic stability and impede progress toward Vision 2030 and the African Union’s Agenda 2063. Mnangagwa’s call for transparency, fair claims processes, and regulatory modernisation is not rhetorical; it is essential for unlocking capital, fostering confidence, and ensuring insurance serves all segments of society, not only the privileged few.
The Insurance Institute of Zimbabwe echoed this urgency, noting that the sector stands at a pivotal moment. Incremental reform will not suffice. The future of African insurance lies in inclusion, simplicity, and relevance. Products tailored to smallholder farmers, informal traders, and climate-exposed populations will protect livelihoods while strengthening the broader economy. The rise of InsurTech, digital platforms, and a young, digitally literate population presents an unprecedented opportunity to create accessible, cost-effective solutions that position insurance as both a source of protection and a driver of development capital.
