ZIMBABWE’s insurance and pension industries continue to fall short of the statutory minimum requirements for prescribed asset investments, the Insurance and Pensions Commission (Ipec) has revealed, despite an increasing number of approved investment instruments.
Under current regulations, pension funds must allocate at least 20% of their portfolios to prescribed assets, while life assurance companies and short-term insurers are required to invest 15% and 10%, respectively.
However, Ipec’s second-quarter report for 2025 shows that none of the three sectors met the required thresholds as of June.
In the life assurance sector, total prescribed asset holdings stood at ZiG1,38 billion (US$51 million), translating to an average compliance level of just 8,66%. Of the 12 life insurers, only CBZ Life, Nhaka Life, Econet Life and Fidelity Life achieved the regulatory minimum.
“The Commission expects the sector to enhance its investments in prescribed assets as more diversified prescribed asset investments are being offered to meet established minimum thresholds,” Ipec said.
Despite the compliance gap, the regulator said the life insurance industry remains poised for “guarded optimism”, adding that its continued relevance will depend on its ability to innovate, adapt and build public trust.
The short-term insurance sector also underperformed, with total prescribed asset investments rising 9% year-to-date to ZiG410,48 million (US$15,23 million).
Yet, compliance levels averaged only 8% and prescribed assets accounted for just 5% of total assets. Only seven of the 19 insurers met the statutory minimum.
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“Insurers are encouraged to intensify their compliance efforts to meet the regulatory minimums,” Ipec said.
The pensions industry reflected a similar trend. Prescribed asset investments declined 2% to US$274 million by the end of June, from US$280 million in March, yielding a compliance ratio of 10,43%.
“To meet the required minimum threshold, the sector is encouraged to invest in a range of instruments accorded prescribed asset status,” Ipec said.
This persistent underperformance comes despite the ministry of Finance, Economic Development and Investment Promotion approving 11 new prescribed asset instruments in the first half of the year.
Ipec said these projects provide valuable opportunities for portfolio diversification and support national development priorities under the National Development Strategy 1.
The regulator noted that the pension sector continues to operate in a relatively stable macroeconomic environment, underpinned by a projected 6,6% economic growth and moderate inflation.
Pension funds are increasingly diversifying into real assets such as property to hedge against potential economic shocks, though Ipec warned that such investments “pose a liquidity risk due to their illiquid nature”.
In a related development, the commission revealed it had approved offshore investments of up to 15% of fund values, a move expected to attract greater participation as funds seek US dollar–denominated returns.
