ZB Reinsurance, a wholly-owned subsidiary of ZB Financial Holdings, has been given the green light to roll out services in Mozambique by the Insurance Institute of Mozambique (ISSM) and has started underwriting its business from Harare, it has been learnt.
The financial services group, which has been eager to enter Mozambique’s insurance market, started operations there in January.
The IMF forecasts Mozambique’s economy to grow 7,9 percent this year.
In 2014, the Southern African country was the fifth-highest recipient of FDI in Africa at US$3,5 billion. Investments are expected to grow to US$9 billion this year.
It is this growth that ZB Reinsurance wants to tap into.
ZBFH group corporate services head Mr Shadowsight Chiganze said last week, “We have concluded all the processes required and we are now using the required money (US$10 million) to start the insurance business in Mozambique.
“Our reinsurance outfit has been writing business in that market from Zimbabwe for a while and we continue to pursue both options depending on the opportunity available at any given time.”
ZB’s expansion will help it grow revenues and spread risk.
Optimum returns from the business are expected within the usual reinsurance cycle.
Despite challenges that have been faced by Zimbabwean businesses in Mozambique, ZB is optimistic its model is feasible.
Nicoz Diamond’s Mozambican Reinsurance outlet Diamond Seguros has been racking up losses since inception though the company remains optimistic.
“Strategically we will roll out structures in line with our business plans. So far, the bulk of the business we have from that market is adequately handled by our office in Harare.
“We are not making any rush decisions on this project. Our idea is not just to put up structures there but to ensure that we appropriately position our reinsurance operation in order to take up opportunities more efficiently.
“We are happy with the gradual increase of our presence in that market among other regional markets from which we source business,” added Mr Chiganze.
ZB recorded a 191 percent increase in profits to US$8,9 million last year from a loss of US$9,8 million in 2014.
ZB chief executive Ron Mutandagayi told analysts recently that the company would continue to look for opportunities to grow its asset base and profits. – The Sunday Mail