THE Insurance Institute of Zimbabwe (IIZ) said yesterday that the country’s volatile economic landscape required companies to continuously review strategies to bolster their capacity to defend balance sheets.

In a keynote address to insurance industry leaders at the start of the IIZ’s winter school here, Panganai Sanangurai, the organisation’s president said futuristic policies were vital to drive the growth of Zimbabwe’s insurance sector and win back market confidence.

Zimbabwe’s insurance industry is making its way out of pandemic-induced hard lockdowns that have stifled worldwide growth since 2020.

The country’s problems have been compounded by the fact that volatilities had returned to haunt the economy in 2019, following radical monetary policy measures by the Reserve Bank of Zimbabwe.

The measures brought the country’s currency back as the key medium of exchange.

A decade earlier, the southern African country had seen its currency collapse as annual inflation hit 500 billion percent in December 2008.

Many Zimbabweans lost billions in savings in financial markets including the insurance sector, hitting market confidence.

But with pandemic tailwinds swinging out, markets have now been affected by the Russia/Ukraine war, which has stifled global supply chains.

“What it (the economic crisis) means then is that more effort is required by everyone to remain afloat at the same time making sure that we preserve value for our clients,” Sanangurai told delegates.

He said the industry should roll out strategies that help it regain market confidence.

“We must gain their confidence. (We must) not only look at how our profits can grow, but how we can impact our nation. I can list all the challenges…but it gives me comfort that we are gathered here to discuss means and ways for manoeuvring in this environment and to mitigate any resultant problems confronting our businesses.” Sanangurai added.

The IIZ chief called upon sector players to create value across a cross-section of stakeholders including shareholders.

He warned insurers to prepare for new challenges as the world recovers from the COVID–19 pandemic while scouting for opportunities that the shift brings.

Low confidence in the industry has hammered revenues and sparked off a human capital and expertise flight to stable economies, according to official reports.

Sanangurai also spoke about the need to embrace change.

“According to Kent Beck an American software engineer, the business changes, the technology changes, the team change. The problem isn’t change per se, because change is going to happen. The problem, rather, is the inability to cope with change when it comes,” he added.

“It is no longer an opinion that the world has changed and is still changing at a faster pace than we anticipated before the COVID-19 pandemic hit us. The COVID-19 crisis continues to have a significant impact on individuals, society, business and the wider economy across the globe. The insurance industry has not escaped its impact, but insurers have responded quickly to the crisis. As the broader economy recovers and responds to the pandemic, insurers will face a number of challenges but also see many new opportunities in the medium to long term.”

Experts say the growth of the industry is closely linked to the growth of the countries’ economies.

But Zimbabwe is currently battling to restore stability due to foreign currency shortages and exchange rate volatilities.

The IIZ’s winter school is being held under the theme Purpose Led and Connected: Insurers in a Rapidly Changing World.

Source Newsday