Off the nail and into action: Awakening Zimbabwe’s insurance future

One morning, a man strolls down the street on his way to work.

As he passes a row of houses, nearly every dog on each porch erupts in loud barking—except one.

That dog sits silently, whimpering and moaning in discomfort.

Intrigued, the man watches the dog for days.

Eventually, curiosity gets the better of him. He knocks on the door and asks the homeowner, “What’s wrong with your dog?”

“He’s sitting on a nail,” the owner replies.

Baffled, the man asks, “Then why doesn’t he move?”

The owner shrugs. “I suppose it doesn’t hurt enough.”

This story mirrors how many people approach insurance: aware that something’s wrong, but not uncomfortable enough to seek change.

At the Life Offices Association of Zimbabwe (LOAZ), we believe it’s time to get off the nail.

We are thrilled to launch a national conversation aimed at reshaping and revitalising Zimbabwe’s insurance industry.

Over the coming weeks, we’ll roll out a series of articles to inform, empower, and inspire individuals, entrepreneurs, corporates, and stakeholders to engage deeply with the insurance sector.

Our goal is to spotlight the value of insurance, confront industry challenges, and build a future-ready, inclusive insurance ecosystem.

 A vibrant insurance industry is not just beneficial—it’s essential for Zimbabwe’s economic recovery.

The Historical Roots of Insurance

Let’s take a step back in time. The origins of insurance can be traced to ancient Africa, where early hunters banded together on expeditions, sharing their catches to minimize the risk of returning empty-handed.

This age-old principle of collective safety—where strength lies in numbers—forms the foundation of modern insurance practices.

Similarly, over 4,000 years ago, Chinese and Babylonian traders employed early methods of risk distribution. Chinese merchants navigating perilous river rapids would spread their goods across multiple vessels to safeguard against the risk of capsizing.

These ancient customs have evolved, shaping the sophisticated insurance industry we recognize today.

Understanding the Insurance Business

At its core, insurance is about pooling risks from a diverse array of entities, whether individuals or companies.

In exchange for a fee—which varies based on the likelihood and potential cost of a loss—policyholders receive protection against certain risks. For an entity to qualify for coverage, the risk must possess specific characteristics that render it insurable.

An insurer, or insurance carrier, is the entity that sells insurance policies, while the insured, or policyholder, is the individual or organization purchasing the coverage. Each insurance policy outlines the conditions under which financial compensation will be provided, creating a safety net for the insured.

Types of Insurance

Insurance can be broadly categorized into two main forms: Long Term Insurance and Short-Term Insurance.

Long Term Insurance, often referred to as life insurance, includes policies with terms extending beyond one year.

These products are typically divided into two categories: protection and savings. Protection products are designed to alleviate the financial burdens on dependents or beneficiaries in the event of death or disability of the insured. It’s important to note that the life assured—the individual whose life the policy is based on—does not have to be the same as the insured.

Savings products, on the other hand, enable individuals to set aside funds for specific future needs, like retirement or educational expenses. Many options exist that combine both protection and savings features.

Short Term Insurance covers all forms of insurance other than life insurance. It allows individuals to insure their possessions or themselves on an annual or short-term basis. This category includes vehicle, property, household, medical, personal liability, travel, and business insurance. The short-term nature of these policies reflects the evolving insurance needs of policyholders over time.

Demystifying Insurance: Moving Forward Together

Now, let’s dive into some key insurance terms that will enhance your understanding of the industry. These terms will come in handy as our conversation progresses in the coming weeks.

• Insurance Policy/Contract: This is an agreement between the insurer and the policyholder, where the insurer agrees to pay benefits upon specified events in exchange for premiums. Policy documents must be studied carefully and stored securely, as they contain critical information.
• Sum Assured: This is the amount of cover provided by an insurance policy, paid out in the event of a valid claim, typically referenced in life insurance.
• Premium: The amount of money the policyholder must pay to obtain insurance cover, which can be paid as a lump sum or in installments.
• Policy Lapse: This occurs when the policyholder fails to meet the conditions set out in the insurance policy, often due to non-payment of premiums.
• Policy Cancellation: This is when insurance cover stops before the policy’s maturity date, often resulting in a return of premiums.
• Policy Reinstatement/Revival: This allows a previously terminated policy to resume active coverage, often requiring compensation to the insurer.
• Claim: The application to the insurance company for benefits as outlined in the policy document. Policyholders must file a claim before any payment can be disbursed.
• Principle of Utmost Good Faith: The insured must disclose all relevant facts about the risk, and insurers must provide full details of the cover. Failure to adhere to this principle may invalidate the contract and potentially result in claims being denied.

Join the Conversation

As we launch this initiative, we invite you to engage with us. Your views, contributions and insights are vital to our efforts to rebuild and restore confidence in the insurance industry. Together, we can set the stage for a brighter future for the sector and by extension, for the economy of Zimbabwe.

We look forward to embarking on this journey with you, tackling the challenges ahead, and exploring the opportunities that lie within the insurance landscape. Stay tuned for more articles and discussions as we work together to uplift the insurance sector in Zimbabwe.

Contact us:

Physical Address: 7 Lloyd Close, Ballantyne Park, Harare

Website: www.loa.co.zw
Email: info@loa.co.zw
Landlines: (+263) 242 884 628, 884 646