- Brokers placed 94% of US$105 million in premiums through foreign currency policies during HY2026
- Net commissions increased 22%, while administrative expenses rose 27% and profits declined
- IPEC's capital disclosures contain conflicting figures for reinsurance broker compliance, requiring regulatory clarification
Harare- Zimbabwe's insurance brokers have facilitated approximately US$105 million in gross premiums during the first half of 2026, with foreign currency accounting for 94% of the business, according to the Insurance and Pensions Commission (IPEC). Reinsurance brokers handled a further US$45.88 million, with approximately 96% denominated in foreign currency.
The concentration places insurance intermediaries among the most dollarised participants in Zimbabwe's financial services sector, reflecting the importance of foreign currency in pricing and transferring commercial risks. It also comes during a period of rising operating costs and tighter capital requirements, placing greater scrutiny on the financial strength of brokers and the value of their services to policyholders.
According to IPEC's Short-Term Insurance Sector Report for the half-year ended 30 June 2026, direct insurance brokers recorded gross premiums receivable of US$105.1 million, representing a 14% increase from US$92.1 million during the comparable period in 2025. Net brokerage commissions rose by 22% to US$14.8 million from US$12.1 million, while foreign currency premiums reached US$99 million. Reinsurance brokers reported gross premiums receivable of US$45.88 million, an increase of 1%, while net commissions rose by 8% to US$1.82 million.
The latest performance follows a weaker full year in 2025, when direct insurance brokers reported approximately ZiG4.16 billion in gross premiums, equivalent to US$156 million, and net brokerage commissions of ZiG608 million, or approximately US$23 million. These represented annual declines of 3% and 7%, respectively, which IPEC partly attributed to exchange rate movements.
The first six months of 2026 generated gross premiums equivalent to approximately 67% of the previous full-year total. The comparison provides an indication of business volumes against the previous annual benchmark, although exchange rate conversions and the timing of premium recognition limit conclusions about the pace of underlying growth.
The strongest indication of increased activity comes from the corresponding half-year comparison, which shows a 14% expansion in premiums and 22% growth in commissions. The figures establish that brokers generated more business and commission income during the reporting period, with profitability providing a separate measure of the financial results achieved.
The 94% foreign currency share recorded by direct brokers exceeds the corresponding proportion reported by insurers. According to IPEC, direct short-term insurers and microinsurers generated combined insurance revenue of US$170.83 million in HY2026, of which US$136.76 million, or 80%, was denominated in foreign currency. The difference of 14 percentage points demonstrates that business placed through brokers has a greater foreign currency concentration than the broader direct insurance market.
The distinction is commercially relevant for companies insuring assets with foreign currency replacement costs. Mining machinery, imported industrial equipment, commercial property and transport fleets can expose businesses to significant replacement expenditure after a loss. Currency mismatches between the value of insured assets, policy limits and claims settlements can leave businesses with liabilities exceeding their insurance recoveries.
Insurance brokers can reduce these exposures by assessing replacement values, negotiating policy terms and ensuring appropriate treatment of currency risks. Their responsibilities extend to examining exclusions, deductibles and the ability of insurers to settle claims under the agreed policy conditions.
The available sector statistics do not identify the industries responsible for the higher foreign currency concentration among brokers. Corporate insurance requirements provide a plausible explanation, although establishing the contribution of mining, manufacturing, agriculture and other sectors would require IPEC to publish brokered premium data by class of business and client category.
The distinction between premiums handled by brokers and insurance revenue reported by underwriters must also be maintained. Brokers report gross premiums associated with policies they arrange, while insurers recognise insurance revenue under IFRS 17 based on insurance services provided during the reporting period. The figures overlap economically and cannot be added together to determine total insurance activity.
The financial results reveal growing pressure on brokerage profitability. Direct brokers reported net commissions of US$14.8 million, up 22%, while administrative expenses increased by approximately 27% to US$10 million. Profit before tax rose by 10% to US$5.7 million, although profit after tax declined marginally to US$4.1 million from approximately US$4.2 million.
The divergence between commission income and profitability demonstrates that additional premium business is being accompanied by higher operating expenditure. Net commissions represented approximately 14.1% of gross premiums receivable during the first half of 2026, compared with approximately 13.1% in the comparable period. The improvement in commission yield did not translate into higher net earnings because administrative expenditure and taxation absorbed the benefit.
The pressure was more pronounced among reinsurance brokers. Gross premiums receivable increased by only 1% to US$45.88 million, while net commissions improved by 8% to US$1.82 million. Administrative expenses increased by approximately 15% to US$1.81 million, leaving profit after tax at approximately US$90,000, down 53% from US$180,000 in the previous period.
These results point to differences in the earnings capacity of Zimbabwe's insurance intermediary segments. Direct brokers expanded business volumes and commission income sufficiently to maintain overall profitability, while reinsurance brokers experienced a substantial reduction in earnings despite modest revenue growth.
For clients, commission growth does not independently establish improved insurance protection. The economic value of brokerage services also depends on the adequacy of cover arranged, insurer selection, the cost of premiums and the effectiveness of support when claims arise.
The importance of effective brokerage services is reinforced by continuing concerns over insurance claims. Figures cited from IPEC's 2025 complaints statistics show that delayed claim settlements accounted for 35.2% of complaints, while disputed claims and policy exclusions represented another 34.1%.
These figures concern complaints received by the insurance regulator and do not establish that brokers were responsible for the underlying disputes. They nevertheless identify the areas where policyholders face substantial difficulties in obtaining the protection they expected when purchasing insurance.
In June 2026, the Chartered Governance and Accountancy Institute in Zimbabwe called for clearer guidance on currency and asset valuation in insurance contracts. The institute raised concerns about the effect of monetary changes on the adequacy of sums insured and the settlement value of claims.
For businesses acquiring insurance through intermediaries, the adequacy of cover requires regular assessment against prevailing replacement costs. A policy denominated in foreign currency may reduce exposure to exchange rate depreciation, although exclusions, deductibles, valuation provisions and claims procedures continue to influence the amount ultimately recovered after a loss.
The complaints statistics strengthen the case for measuring broker performance beyond gross premiums placed. Information on claims assistance, settlement outcomes and policyholder complaints involving intermediaries would provide a more complete assessment of the industry's contribution to financial protection.
Reinsurance capacity offers an opportunity to improve coverage
Zimbabwean insurers also rely on reinsurance arrangements to manage exposure to large individual losses and events affecting multiple policyholders. Reinsurance brokers arrange these protections with domestic, regional and international markets, with approximately US$44 million of their HY2026 premiums denominated in foreign currency.
The high foreign currency share reflects the international character of reinsurance arrangements, although the reported premiums cannot automatically be treated as capital transferred outside Zimbabwe. Premium collections, payments to reinsurers, brokerage commissions and claims recoveries are governed by separate contractual arrangements.
International reinsurance market conditions have become more favourable for buyers. According to Guy Carpenter's July 2026 renewal assessment, its global property catastrophe rate on line index declined by approximately 16% during the year, supported by greater reinsurance capacity and increased competition among providers.
The reduction relates to international property catastrophe reinsurance pricing and does not establish an equivalent decrease across all insurance classes or Zimbabwean renewal contracts. Local insurers' claims histories, catastrophe exposure, currency risks and contract structures will influence the terms available during future renewals.
The more competitive international market creates an opportunity for brokers to negotiate improved reinsurance protection. Evidence of benefits to local businesses would emerge through lower risk-adjusted premiums, broader coverage, improved claims provisions or greater capacity to insure assets and activities previously subject to restrictive terms.
Zimbabwe strengthened the regulatory requirements for insurance intermediaries through Statutory Instrument 67 of 2025, which established a minimum unencumbered capital requirement equivalent to US$100,000 for insurance brokers. The instrument also requires professional indemnity insurance of at least US$200,000 or 50% of the broker's net brokerage income during the preceding year, whichever is greater.
The requirements seek to strengthen the financial resources available to intermediaries and provide protection against liabilities arising from professional services. They also increase the capital and compliance obligations facing smaller brokerage businesses.
IPEC's June 2026 report shows that 27 of the country's 29 direct insurance brokers met the minimum capital requirement, leaving two below the prescribed threshold. The result represents compliance of approximately 93% among direct brokers.
The regulator's disclosure on reinsurance brokers contains an inconsistency. Its executive summary states that seven of nine brokers met the required capital threshold, implying two were below the minimum. The detailed capitalisation section, however, reports one noncompliant reinsurance broker and provides capital figures for eight firms, of which seven exceed US$100,000.
The discrepancy requires clarification because the reported number of compliant and noncompliant businesses forms part of the regulator's assessment of financial sector soundness. It also affects the accuracy of public information available to insurance clients and counterparties assessing the financial standing of intermediaries.
The sector has nevertheless recorded an improvement against the position reported in September 2024. Zimbabwe's 2025 National Budget Statement indicated that 19 of 27 direct brokers and three of eight reinsurance brokers met their applicable minimum capital requirements at that time. Differences in the reporting framework and timing must be considered, although the comparison provides evidence of progress in capital compliance over the intervening period.
Further governance obligations were introduced through Statutory Instrument 44 of 2026. These include requirements governing board composition, independent oversight and significant ownership interests linking insurers, insurance brokers and reinsurance companies.
Where regulatory approval is granted for significant cross-ownership, the regulations restrict the relevant business exposure to 20% of an insurer's total gross premium business. The measure addresses the possibility that ownership connections could influence the allocation of insurance business, potentially weakening competition and the independence expected of intermediaries.
The industry's future performance will increasingly require examination across three measurable dimensions: premium business generated, financial returns retained and the quality of protection delivered to policyholders. Direct brokers have recorded stronger activity and commission income during 2026, while rising expenses and the unresolved capital reporting discrepancy reveal areas requiring closer regulatory scrutiny.
Greater disclosure of brokerage concentration, professional indemnity compliance and claims outcomes would allow businesses to assess the protection available through intermediaries more effectively. For IPEC, the immediate reporting priority is to reconcile its reinsurance broker capital figures, while the broader supervisory responsibility lies in establishing that increasing insurance volumes are accompanied by sound intermediary finances and reliable policyholder protection.
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