From Risk to Resilience: Why Insurance Matters for Zambia’s Future

By Alain Kabinda

LUSAKA — When a farmer plants a crop, a family builds a home, an entrepreneur starts a business or an investor commits money to a major project, there is always an element of risk.

A drought can destroy a harvest. A fire can wipe out a business. An accident can leave a family facing unexpected costs. Illness can disrupt household finances, while theft, fraud and other unforeseen events can erase years of investment.

Yet behind each of these risks is a question that is often overlooked: what happens after the loss?

For Zambia's insurance industry, the answer is increasingly being framed around financial resilience.

As the country marked National Insurance Week 2026 under the theme “Insurance – Facing the Future with Confidence,” industry and Government leaders used the occasion to highlight insurance not simply as a financial product, but as a mechanism for protecting livelihoods, businesses and investments.

Speaking during the event in Lusaka representing the President of the Insurers Association of Zambia (IAZ), Dr Webster Twaambo, ZSIC Life Managing Director Mr. Collins Hamusonde said the theme reflected the industry's desire to help members of the public understand insurance and make use of appropriate insurance solutions.

He said Zambia's economic ambitions would need to be accompanied by mechanisms capable of protecting the wealth and investments being created.

A business that loses its assets through fire or another insured event may require financial support to recover. A farmer affected by adverse weather may need protection against the loss of income. A family facing an unexpected health or other financial shock can similarly be pushed into financial difficulty.

There are signs that insurance coverage is expanding, although the sector says significant gaps remain.

According to figures presented at the Insurance Week launch, the proportion of adults in Zambia using insurance services increased from 6.3 percent in 2020 to 10.4 percent in 2025, based on the FinScope Survey.

The increase represents progress, but also means that a large proportion of the population remains outside formal insurance protection.

The industry has therefore identified consumer education, product design and service delivery as areas requiring continued attention.

Mr. Hamusonde said myths and misconceptions about insurance continued to affect uptake, while the industry also needed to rethink how it communicates with younger consumers.

He said consumers increasingly expected simpler processes, greater convenience and faster resolution of claims and service-related concerns.

And speaking on behalf of the Secretary to the Treasury, Felix Nkulukusa, Permanent Secretary for Economic Management and Finance Division Mr. Mulele Mulele said insurance should provide people with peace of mind and a financial safety net against accidents, illness, adverse weather, property losses, legal liabilities and other unexpected shocks.

He said confidence in insurance depended on consumers understanding what they were buying.

People need to know what is covered, what is excluded, what premiums they are paying and what they should expect when they make a legitimate claim, he said.

The Second National Financial Inclusion Strategy (NFIS II), covering 2024 to 2028, seeks to expand access to and effective use of quality, affordable and inclusive financial products and services, including insurance.

Insurance therefore forms part of a broader financial inclusion agenda that goes beyond having a bank account or mobile wallet.

As Mulele put it, true financial inclusion must also enable people to protect what they earn, own and build.

Meanwhile Dr Brian Manchishi, Deputy Registrar–Insurance, said confidence had to be built through greater public awareness, clear communication, fair treatment of consumers, quality service delivery and meaningful engagement.

He said, provides a platform for bringing the industry closer to consumers and creating opportunities for direct conversations.

Insurance is ultimately a promise: consumers pay premiums because they expect financial protection when an insured event occurs.

Government therefore urged insurers to settle legitimate claims promptly, fairly and efficiently, clearly explain products and exclusions, and handle complaints professionally.

Government and the insurance industry have been working to extend weather-index insurance to farmers under the Farmer Input Support Programme (FISP).

Hamusonde said the programme had encountered some initial implementation challenges but expressed confidence that lessons from the experience could contribute to improved implementation in the coming agricultural season.

Climate-related risks remain a major concern for farmers whose livelihoods depend heavily on weather conditions.

Insurance can provide a mechanism for managing some of those risks, helping farmers recover rather than absorb the entire financial impact of adverse weather.

The connection between insurance and Zambia's economic ambitions was another major theme of the launch.

Mr Mulele added that the Grow Zambia agenda, with its focus on increasing production and investment in agriculture, mining, energy, tourism, manufacturing and infrastructure, would require stronger mechanisms for protecting investment.

Mr. Mulele said that as the country increases production, expands businesses and develops infrastructure, it must also strengthen the mechanisms that protect those investments.

Insurance can support this process by allowing risks to be identified, priced and transferred.

For investors and financial institutions, appropriate risk protection can form part of the broader environment required to commit capital to productive projects.

Insurance companies are institutional investors and mobilisers of long-term savings. Government said the sector could therefore contribute to mobilising domestic resources for productive investments in areas such as infrastructure, housing, agriculture, energy and manufacturing.

Mr. Mulele said that Government has specifically identified low-income households, informal-sector workers, farmers, rural communities and micro, small and medium-sized enterprises as groups requiring greater attention.

A seasonal farmer does not have the same financial circumstances as a salaried employee. A market trader faces different risks from a large corporation, while a young entrepreneur starting a business has different needs from an established company.

He therefore challenged the insurance sector to develop products that reflect these differences.

Hamusonde said the insurance sector now had access to tools including advanced telecommunications, information and communication technologies and artificial intelligence that could be used to improve accessibility, efficiency and customer experience.

Digital platforms and alternative distribution channels could help insurers reach customers at lower cost, particularly in communities where traditional insurance distribution may be difficult.

As more services become digital, consumers will still need clear information about products, premiums, exclusions, claims and their rights.

The 2025 FinScope Survey showed overall financial inclusion increasing from 69.4 percent in 2020 to 80.1 percent in 2025, while rural financial inclusion rose from 55.9 percent to 72.5 percent over the same period.

The increase in insurance uptake from 6.3 percent to 10.4 percent forms part of this broader movement.

If insurance is to become an integral part of household financial planning and business development, consumers must understand its value, insurers must provide products that meet real needs, and regulators must maintain an environment that protects policyholders while allowing responsible innovation.

The challenge for Zambia's insurance industry is therefore bigger than increasing the number of policies sold.

It is about building a culture in which individuals, families, farmers and businesses think about risk before disaster strikes.