Zimbabwe Insurance to do business in foreign curreny

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The government of Zimbabwe enacted a new legislation governing insurance companies and pension funds.

The terms of the regulation enunciate that insurers and pension funds may now conduct business in foreign currencies. The measure has been taken with the aim to protect the sector from hyperinflation.

In 2019, the authorities imposed the exclusive use of the Zimbabwean dollar in local transactions, despite the US dollar-denominated policies.

Having been pressured by local insurers, the Zimbabwean Insurance Regulatory Authority (IPEC) has decided to authorize U.S-dollar policies.

The insurance industry in Zimbabwe continues to offer very limited real growth potential.

The Covid-19 pandemic,though relatively contained in the country, has nonetheless had a major economic impact due to nationwide restrictions onmovement and disruption to trade, deepening Zimbabwe’s recession in 2020 and delaying any prospect of recovery.

High unemployment and informal employment rates mean many households are still excluded from traditional covers while very lowaverage income rates will keep the focus on only the most basic product lines.

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