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FINANCE and Economic Development minister Mthuli Ncube has warned that Zimbabwe’s insurance sector faces one of its toughest times, with geopolitical tensions and disruptions to business models under the COVID–19 pandemic, among other areas of concern.

Ncube told delegates at the Insurance Institute of Zimbabwe’s 2021 annual conference in Nyanga that operators must watch their overheads during turbulent times to ride out the uncertainties, which are also being felt across other markets.

He said a “political gridlock” in Zimbabwe would continue to present uncertainties to the industry.

“Insurance company boards of directors, along with boards across other industries, face a daunting landscape this year,”

the minister said.

“Apart from the effects and the impact of the pandemic which every economy worldwide is smarting from, global volatility, driven by trade and geopolitical tensions, resurging debt, technology and business model disruption, elevated cyber risk, regulatory scrutiny and political gridlock in the Republic of Zimbabwe and elsewhere also add to boards’ challenges and pressures.

“I believe many boards of insurers will see 2021-22 as a turning point in critical areas, which may include but are not limited to corporate governance, with demands for greater attention to corporate purpose and stakeholder views, corporate culture and incentives, diversity and inclusion, the richness of boardroom dialogue and debate and the company’s readiness for the risks and opportunities ahead, some of which may be backed up by investor votes against directors.”

The minister said it was important that the insurance industry reaffirmed the purpose of insurance in the next 12 months.

The insurance sector has had a mixed experience since the onset of the pandemic, with many companies quickly responding by putting in place measures that help them sustain operations.

Ncube said it was important for the sector to be proactive in confronting the challenges ahead.

“As the situation plays out, insurers can be proactive relative to their important societal role. For one, they can seek to accelerate claims processing and streamline their customer service functions.

“They can also engage with elected officials and regulators to demonstrate leadership in the restoration of the global economy, and to develop public-private solutions for recovery and for protection against future events.

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