Published: 08 May 2014

Finance and Economic Development minister Patrick Chinamasa says government will compel international companies investing in the country to have a portion of insurance risk covered by  local insurance companies.

This comes amid indications that global firms investing in the country were covering local risk with international insurance companies residing outside Zimbabwe, fuelling a persistent liquidity challenge in the economy.

Speaking at Fidelity Life Southview Park groundbreaking ceremony held in Harare yesterday, minister Chinamasa said government would factor in local risk cover in negotiating investment deals.

"Companies which are coming in here as investors are not insuring their risk with Zimbabwean insurance companies. I was not aware of this. It was only brought to my attention just now.

"This is a matter that we are going to engage anyone as we negotiate big power or roads projects or whatever.

"We have to factor in those negotiations the portion of risk that can be insured locally. It is important for our economic development to build institutions which are robust. Such institutions are insurance and banking institutions," he said.

Asked about local insurance companies' capacity to cover risks for global companies, given that some firms are facing closure for abusing premiums and cashflows,  Insurance and Pensions Commission (IPEC), acting Commissioner Pupurai Togarepi said international companies should first exhaust local insurers' capacity.

"There are lot of options like re-insurance that local firms can do. Apart from that, the law provides that local insurance firms can refer companies to other big international insurance," he said.

Zimbabwe insurance sector has numerous local insurers.After some international insurance firms closed over compliance with the Indigenisation Act promulgated in 2007.

Last year, Aon Holdings Limited rebranded to Minerva Holdings following its successful acquisition by Masawara.
- Zim Mail

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