First Mutual Holdings (FMH) says ongoing currency instability and inflationary pressures continue to undermine confidence in long-term savings products, limiting demand for life assurance and investment-linked policies.
In its annual report for the year ended 31 December 2025, the diversified financial services group said uncertainty surrounding Zimbabwe’s monetary policy framework remains a major challenge for the life assurance sector.
“Repeated currency shifts and sustained inflation have eroded public confidence in long-term savings, and uncertainty around a potential return to mono-currency suppressed uptake of savings products during 2025,” FMH said.
The concerns come as debate continues around the country’s long-term currency framework.
The Reserve Bank of Zimbabwe (RBZ) recently indicated that any transition to a mono-currency system would depend on the fulfilment of key economic conditions rather than adherence to the previously announced 2030 target.
Among the benchmarks identified by the central bank are the accumulation of foreign currency reserves sufficient to cover between three and six months of imports, as well as the maintenance of single-digit inflation levels.
The uncertainty has contributed to caution among consumers considering long-term investment, retirement and savings products, a trend that continues to affect the broader insurance and pensions industry.
Zimbabwe’s history of currency reforms and inflationary episodes has repeatedly disrupted long-term financial planning, forcing insurers to adapt products and strategies to changing economic realities.
Despite these challenges, FMH reported solid growth within its life assurance business during the year under review.
The group said increased demand for risk-based products and stronger penetration within the formal employment sector supported growth across its policyholder base.
Combined policyholder lives increased nine percent to 550 115 during the year. Retail policyholder lives rose five percent to 347 339, while corporate policyholder lives grew 17 percent to 202 776.
According to the group, the increase reflects improved product relevance and growing demand for employer-sponsored insurance and employee benefit schemes.
First Mutual Life, the group’s life assurance subsidiary, provides long-term insurance, funeral cover, retirement savings products and employee benefit solutions.
The business recorded insurance contract revenue of US$15,3 million, representing a 22 percent increase compared to the previous year.
Profit for the period surged 313 percent to US$3,5 million, driven by growth in group risk schemes and retail funeral products, disciplined cost management and favourable investment returns.
FMH chief executive Douglas Hoto said the group remains focused on aligning its products with changing customer requirements while investing in future growth opportunities.
“This customer focus, combined with a strong financial foundation and growing regional presence, positions the group for sustainable growth,” Hoto said.
He added that technology and innovation would remain central to the group’s strategy.
“We are strengthening this position further through targeted investment in technology and innovation, enhancing how we deliver service and how our customers experience our brand, thereby securing our long-term competitive advantage,” Hoto said.
Meanwhile, First Mutual Health delivered strong revenue growth during the year, with insurance contract revenue increasing 22 percent to US$73,5 million.
The growth was largely driven by rising demand for United States dollar-denominated medical aid products.
However, profitability within the health insurance business declined, with profit falling six percent to US$5,4 million.
The group attributed the decline to weaker investment income and increased utilisation of healthcare benefits by members during the reporting period.