GOVERNMENT has moved to reassure the insurance sector that no value will be lost on existing US dollar policies as Zimbabwe transitions to a monocurrency system, instructing the industry to develop clear “grandfathering” plans to protect policyholders.
The call, made by Finance deputy minister Kudakwashe Mnangagwa, comes in response to mounting industry anxiety over how US dollar-denominated life, short-term and micro-insurance contracts will be honoured after the 2030 deadline for adopting the Zimbabwe Gold (ZiG).
Speaking at the ongoing Southern African Insurance Indaba, Mnangagwa indicated that the 2030 timeline was established at industry’s request so that there is certainty.
“Through engagements with industry players, they said, ‘if you tell us for how long, we’ll be comfortable’,” Mnangagwa said.
“Industry came up with a consensus that if we have a 2030 deadline, we will be comfortable as a business.
“If you have a life policy that is denominated in US dollars, it will need to be grandfathered.
"That way, you’ve already formed a policy position for your industry.”
Mnangagwa emphasised that the shift to a monocurrency is not an abrupt event, but a process contingent upon achieving key economic fundamentals, including sufficient foreign currency reserves and sustained macroeconomic stability.
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“The ideal situation is that you actually choose to use ZiG and it makes no difference whether you use ZiG or you use dollars,” he said.
“It becomes a matter of choice rather than coercion.”
He urged insurers to ensure the terms of grandfathering are “very clear and understood by both the insurance companies and the clients to preserve value”.
Mnangagwa positioned the insurance industry as the cornerstone of Zimbabwe’s ambition to become a regional financial hub through the Victoria Falls International Financial Services Centre.
He called on the sector to help in unlocking Africa’s economic potential by mobilising capital for infrastructure, strengthening credit markets and driving innovation through partnerships with InsurTech firms.
The indaba is being held under the theme Reimagining Insurance: Unlocking Economic Potential and Building Resilience in Africa.
