Published: 24 June 2025

The Zimbabwean government has gazetted new minimum capital requirements in United States Dollars for players in the insurance sector, a move aimed at strengthening the financial soundness and operational resilience of the industry.

The updated thresholds, announced through a Statutory Instrument issued on Tuesday, replace the previous Zimbabwe dollar-based requirements and are intended to provide more stable and inflation-resistant capital buffers for insurance companies.

Confirming the development, Insurance and Pensions Commission (IPEC) Commissioner Dr Grace Muradzikwa said the changes are designed to enhance the sector's ability to honour claims and protect policyholders.

"As IPEC, our mandate is to protect the interests of policyholders and pension scheme members. The United States Dollar indexed capital thresholds are a step in that direction," she said.

Under the new framework, life assurance companies are now required to hold a minimum capital of US$2 million, funeral assurers US$500,000, short-term insurers US$1.5 million, reinsurers US$2 million, micro-insurers US$100,000, and insurance brokers US$100,000.

Dr Muradzikwa noted that the shift to USD-based thresholds was necessitated by the erosion of the real value of Zimbabwe dollar capital due to persistent inflation and exchange rate volatility.

"Previously, capital requirements were set in local currency. However, due to inflationary pressures and currency volatility, the real value of those requirements has been significantly eroded over time. This undermined the very objective of capital adequacy, which is to ensure that regulated entities maintain a financial buffer that enables them to absorb shocks and meet obligations to clients," she said.

The regulator believes that indexing capital requirements to the US dollar will restore confidence in the insurance sector and help companies remain solvent in the face of economic shocks.

The updated capitalisation framework comes as part of broader efforts to ensure a more robust insurance and pensions sector capable of supporting economic growth and protecting policyholders' interests.

Authorities say the new regime will encourage compliance, improve underwriting capacity, and lay the groundwork for future growth in Zimbabwe's insurance industry.
- ZBC

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