First Mutual Life (FML) has credited the Reserve Bank of Zimbabwe's tight monetary policy for creating the stable operating environment that underpinned its strongest financial performance in recent years.
Presenting the company's 2025 annual report, FML Chairperson Amos Manzai said the central bank's consistent policy stance provided the predictability businesses need to plan and allocate resources effectively. For context on the broader RBZ approach, see the RBZ's first ZiG bill auction benchmark.
What the RBZ did
The RBZ held the Bank Policy Rate at 35% throughout 2025, maintaining a rate significantly above inflation and exchange rate movements on both official and alternative markets. Statutory reserve requirements were set at 15% for savings and time deposits and 30% for call and demand deposits, in both ZiG and USD.
The central bank also continued mopping up excess liquidity through Non-Negotiable Certificates of Deposits, reinforcing the tight conditions that have contributed to ZiG stability. For more on why this matters, see why fiscal discipline matters for ZiG stability.
"The RBZ maintained its tight monetary policy stance during 2025 in pursuit of macroeconomic stability. These measures collectively supported a relatively stable macroeconomic environment, bringing greater predictability and improving the ability of businesses to plan and distribute resources more effectively."
The endorsement is notable because tight monetary policy is often controversial, particularly among businesses that struggle with constrained liquidity and limited access to credit. FML's public support suggests the stability dividend is being felt in sectors that can adapt to the high-rate environment.
FML's performance
The insurer delivered across the board:
- Profit for the year: $3.5 million, up 313%
- Insurance Contract Revenue: $15.3 million, up 22%
- Total insurance contract revenue: $176.8 million, up 10%
- USD-denominated income: 85% of total revenue, up from 75%
Growth was driven by solid premium increases in group risk schemes and retail funeral products, supported by effective cost management and a positive investment outturn.
The informal sector challenge
Manzai also noted a structural headwind: Zimbabwe's informal sector now accounts for 76% of economic activity, according to the Zimbabwe National Statistics Agency. This limits the formal insurance market's addressable base. Still, FML's results show that within the formal economy, stability is translating into measurable growth.
What this tells us
FML's endorsement of RBZ policy carries weight because it is data-backed. The insurer's 313% profit surge is not theoretical. It reflects a real improvement in operating conditions for businesses that can manage the high-rate environment.
The 85% USD revenue share is also important. It suggests FML has effectively hedged against ZiG depreciation by growing its hard-currency book, a strategy that more Zimbabwean companies are adopting as the dual-currency economy solidifies.
