ZiG uncertainty fuels insurance disputes

The Chartered Governance and Accountancy Institute in Zimbabwe (CGAIZ) has called for the establishment of a clear and standardised framework for insurance claim settlements under the Zimbabwe Gold (ZiG) currency system, arguing that uncertainty over valuations continues to undermine confidence in the sector.

Speaking during an interview hosted by the Insurance Institute of Zimbabwe, Lovemore Gomera said regulators and industry players must work together to eliminate ambiguity surrounding claim settlements.

According to Gomera, the Insurance and Pensions Commission (Ipec) and insurance companies should develop and publicly communicate a transparent currency and valuation framework to reduce disputes arising from ZiG-based claims.

"Ipec and the industry must jointly develop and publicly communicate a clear currency and valuation framework for claims settlement under the ZiG monetary system, eliminating the ambiguity that creates valuation disputes," he said.

His remarks come amid renewed debate over pricing discipline in the insurance industry following Ipec's short-term insurance sector report released in March. The regulator urged insurers to align premiums, deductibles and pricing structures with claims inflation and foreign currency-linked replacement costs.

Gomera said insurers should ensure that policyholders fully understand the real value of their cover at every renewal period. He argued that insured values must reflect current replacement costs to address the persistent problem of underinsurance, which has been worsened by Zimbabwe's changing currency environment.

He noted that trust challenges remain a significant issue within the short-term insurance sector. Data cited from Ipec's 2025 reports shows that delayed claim settlements accounted for 35.2 percent of all complaints received, making it the largest source of grievances among policyholders.

Disputed claims and policy exclusions represented a further 34.1 percent of complaints, highlighting what Gomera described as structural weaknesses rather than isolated service failures.

He also pointed to Zimbabwe's repeated currency transitions over the past two decades as a major contributor to valuation uncertainty. The country has moved from the Zimbabwe dollar to the multi-currency regime in 2009, followed by bond notes, the RTGS dollar, the reintroduced Zimbabwe dollar and, most recently, the ZiG in April 2024.

"When a policyholder is not sure what currency their claim will be settled in, or whether the settlement value will reflect the replacement cost of their asset, their scepticism is economically rational, not a reflection of industry malpractice," Gomera said.

Meanwhile, Ipec reported that insurance brokers generated gross premiums of ZiG4.16 billion, equivalent to approximately US$156 million, during 2025. Net brokerage commissions amounted to ZiG608 million, or about US$23 million.

The regulator said gross premiums declined by 3 percent while commissions fell by 7 percent compared to the previous year, with exchange rate movements between 2024 and 2025 cited as one of the contributing factors.

Industry stakeholders believe that greater clarity on claim valuation and settlement mechanisms could help rebuild public trust and improve confidence in Zimbabwe's insurance sector as the country continues to adapt to the ZiG monetary framework.