• IPEC received 144 complaints against short-term insurers during the first half of 2026, up from 66 a year earlier. Delayed claims accounted for 117 complaints, while ten of the country's 21 direct insurers reported negative working capital
• Incurred claims increased 58% to US$71.13 million, lifting the claims ratio to 53%. The industry's reported combined ratio remained below 100%, although liquidity pressures persisted at individual companies
• South Africa's National Financial Ombud secured R442.9 million in consumer recoveries during 2025, while Kenya, Germany and India provide additional examples of publicly measurable complaints and claims outcomes

Harare - Zimbabwe's short-term insurance industry is facing growing scrutiny over delayed claims settlement, with 117 of the 144 complaints received by the Insurance and Pensions Commission (IPEC) during the first half of 2026 involving late payments. Complaints increased approximately 118% from 66 a year earlier, while ten of the country's 21 direct short-term insurers reported negative working capital. South Africa's National Financial Ombud, meanwhile, secured R442.9 million for financial consumers in 2025, publishing both monetary recoveries and dispute-resolution activity. The regional evidence places Zimbabwe's claims administration under closer examination, particularly the enforcement of existing settlement requirements and the availability of public information showing how effectively policyholders obtain their contractual benefits.

IPEC's financial disclosures identify increasing pressure on insurers' claims-paying resources. Incurred claims rose 58% to US$71.13 million from US$44.94 million in the corresponding period of 2025, while the claims ratio increased from 37% to 53%. The ratio measures incurred claims relative to the relevant insurance revenue base and should not be interpreted as the proportion of submitted claims actually paid.

The industry reduced its reported expense ratio from 60% to 45%, while the combined ratio stood at 98%, compared with 99% a year earlier. A combined ratio below 100% generally indicates a positive underwriting result, although the previous year's reported claims and expense ratios do not reconcile directly with the stated combined ratio. The difference requires clarification of the regulatory calculation.

The more immediate concern is the distribution of liquidity across insurers. IPEC reported that liquid assets declined approximately 1.8% to US$185.17 million by June 2026 from US$188.58 million at the end of 2025. Insurance liabilities increased to US$133.64 million, while reinsurance liabilities declined 10% to US$32.95 million.

These are industry aggregates. Individual insurers remain responsible for their own claims and cannot automatically draw upon the liquid assets held by competitors. Negative working capital at ten companies indicates that almost half of the direct short-term insurers had current liabilities exceeding current assets.

The condition does not establish insolvency, but it warrants closer supervision where insurers must settle claims in foreign currency or depend on receivables that have not yet converted into cash.

Asset allocation presents another challenge. Zimbabwean insurers have historically invested in property to preserve value through currency instability. Investment property held by direct short-term insurers increased 23% to US$50.46 million during the half-year, while real estate-linked assets represented approximately 23% of total assets, within the regulatory concentration limit of 25%.

Property can support balance-sheet value and generate rental income, but its conversion into cash may take longer than the settlement period for an admitted insurance claim. Compliance with an investment concentration limit therefore provides limited assurance about immediate claims-paying capacity.

IPEC also identified outstanding premium receivables and delayed reinsurance recoveries as sources of liquidity pressure. Money recognised as receivable cannot finance an immediate settlement until it has been collected. The resulting timing mismatch can affect policyholders even where the insurer expects to recover the amount eventually.

For businesses, these delays have consequences beyond the insurance transaction. A manufacturer awaiting compensation for damaged machinery may postpone repairs or obtain temporary financing, while a transport operator can lose income when an insured vehicle remains unavailable. These are potential commercial effects; establishing losses among the 117 complainants would require individual claims records and evidence of costs incurred.

Zimbabwe has already established requirements governing claims settlement. IPEC's Circular 8 of 2026, issued on 6 March, required insurers and brokers to submit information on claims settled in instalments and those paid outside the prescribed period stipulated in Circular 3 of 2020.

The circular is important because it establishes that the regulatory framework recognises late settlement as a measurable supervisory issue. The investigation therefore concerns the effectiveness of enforcement and the extent to which information collected by the regulator becomes available to policyholders.

Public reporting of claims submitted, admitted, disputed and paid, together with the time taken to complete settlements, would help distinguish liquidity-related delays from legitimate contractual investigations. Monetary recovery data would provide a further measure of the outcome achieved through complaints handling.

South Africa offers an example of that reporting. Its National Financial Ombud Scheme recovered R442.9 million for consumers in 2025, compared with R328.5 million during its inaugural year, an increase of approximately 35%.

Life insurance disputes accounted for R299.63 million of the recoveries, while non-life insurance contributed R82.89 million. Together, insurance complaints generated approximately R382.52 million in relief, representing more than 86% of the total. Banking disputes accounted for approximately R53 million and credit disputes R7.47 million.

The ombudsman opened 50,065 cases during 2025 and closed 34,277. Average monthly case openings increased from 3,585 in 2024 to 4,174 in 2025, representing growth of approximately 16%. The institution also reported improvements in turnaround times across its divisions.

These results do not establish that South African insurers generally fail to honour valid claims. They measure recoveries obtained through a particular dispute-resolution institution, covering cases with different amounts and circumstances.

Their significance lies in the ability to connect complaints administration with financial outcomes. A consumer can assess the amount recovered, the number of cases handled and changes in institutional performance. Zimbabwe's regulatory disclosures would become more informative if comparable outcomes were routinely published.

Funeral insurance provides a relevant comparison between the two markets. South Africa's ombudsman reported that funeral benefits accounted for approximately 46.2% of life insurance complaints during 2025, while general life cover contributed 33.9% and disability cover 7.4%.

Zimbabwe's life insurance market is similarly concentrated in products providing immediate household protection. During the first half of 2026, life assurance revenue increased 34% to approximately US$147.04 million, with funeral assurance contributing around 72% and group life another 11%.

However, IPEC recorded 309,409 policy lapses during the period, lifting the lapse ratio to 14.56% from 13.6% previously. The consequences depend on policy conditions and applicable statutory grace periods, but persistent lapses can reduce continuity of cover and increase the number of households exposed to uninsured financial losses.

The regulator also received 106 life assurance complaints, with 64 concerning unpaid benefits or claim repudiation. These represented approximately 60% of life assurance complaints and are separate from the 144 short-term insurance cases.

The findings suggest that claims administration is an important consumer protection issue across different insurance products, although the underlying circumstances and remedies vary.

Kenya provides another African benchmark. Its Insurance Regulatory Authority recorded 349 complaints during the first quarter of 2025, with 76.5% relating to general insurance and 23.5% to long-term insurance. The regulator reported resolving 200 general insurance complaints, representing 74.9%, and 54 long-term complaints, equivalent to 65.9%.

Combined, the resolved cases represented approximately 72.8% of complaints recorded during the quarter.

More recent industry reporting based on Kenya's first-quarter 2026 regulatory data indicated resolution rates of 41.2% for general insurance and 58.2% for long-term insurance. The decline in the reported general insurance rate raises questions about complaints-handling capacity and the accumulation of unresolved cases.

Resolution rates do not establish that complainants received compensation. A complaint may be resolved through settlement, clarification, withdrawal or rejection. Nevertheless, publishing the rates allows changes in administrative performance to be examined over time.

Europe offers a different regulatory perspective. In its third report on the application of the Insurance Distribution Directive, published on 30 March 2026, the European Insurance and Occupational Pensions Authority reported that complaints to Germany's insurance ombudsman increased by nearly 20% between 2023 and 2024, while complaints to financial regulator BaFin rose approximately 11%.

Delays in claims processing were the main reason for complaints to BaFin. The regulator reminded insurers that claims should generally be settled within one month.

That supervisory expectation provides a useful comparison for Zimbabwe's existing settlement framework. A clearly communicated requirement gains practical value when regulators can measure compliance and demonstrate corrective action against persistent breaches.

European research also identifies problems arising before claims are submitted. A 2024 French mystery-shopping exercise examined insurance distributed alongside mobile phones across 197 visits involving 11 distributors. Approximately 80% of prospective customers were not asked about their demands and needs.

The findings indicate that inadequate explanations during the sale of insurance can create disputes over policy exclusions and benefits. Clearer disclosure and appropriate product recommendations can strengthen consumer protection before an insured event occurs.

India provides another example of measurable claims administration. The Insurance Regulatory and Development Authority of India introduced policyholder protection requirements in 2024 covering claims procedures, transparency and insurer accountability.

According to India's Ministry of Finance, the health insurance claims-settlement ratio by number reached 87.5% during the 2024/25 financial year, compared with 82.46% in 2023/24.

The regulator's Bima Bharosa portal also recorded 137,361 general and health insurance grievances during 2024/25, of which 127,755, approximately 93%, were disposed of in the same financial year.

The claims-settlement ratio and grievance-disposal rate measure different outcomes. Neither establishes average payment time, but publishing both allows the administration of claims and complaints to be assessed separately.

South Africa, Kenya, Germany and India therefore offer four complementary approaches to claims accountability: monetary recoveries, complaint-resolution rates, supervisory settlement expectations and claims-payment statistics.

Zimbabwe already has a foundation for stronger disclosure through IPEC's existing claims-settlement rules and its March 2026 information request. The next improvement would be a quarterly insurer-level performance framework covering claims admitted, settlement amounts, overdue obligations and the median number of days between admission and payment.

The framework should also report complaints per thousand claims and distinguish successful complainant recoveries from cases dismissed or withdrawn. Consistent definitions would allow policyholders to compare companies without relying exclusively on complaint totals, which can be influenced by the size of an insurer's customer base.

Liquidity supervision must accompany the reporting requirements. IPEC has called for stronger cash-flow forecasting, monitoring of reinsurance recoverables and adequate United States dollar liquidity buffers. It has also indicated that insurers with persistent negative working capital and repeated settlement delays will receive closer attention.

These interventions address the conditions associated with late payments. Their effectiveness can be measured through stronger current ratios, fewer overdue admitted claims and shorter settlement periods at the affected insurers.

The role of reinsurance also requires consideration. Reinsurance can reduce an insurer's exposure to major losses, but delays in recovering money from reinsurers can create temporary funding shortages. Effective recovery procedures, appropriate treaty arrangements and prudent liquidity management are therefore necessary to support timely direct claims payments.

Zimbabwe's insurance industry has recorded stronger revenue and maintained substantial investment assets, but its first-half disclosures show that those financial indicators coexist with liquidity weaknesses and considerable dissatisfaction over settlement performance.

The comparative evidence identifies an opportunity to strengthen the link between regulation and consumer outcomes. IPEC's existing reporting and enforcement powers provide a starting point for making claims performance more transparent.

The most meaningful improvement would be a measurable reduction in delayed admitted claims, accompanied by public evidence of how quickly insurers pay and how effectively complaints are resolved. For households and businesses purchasing insurance, dependable settlement remains the practical measure of the protection promised by the policy.

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