Zimbabwe’s biggest Commercial Bank’s two insurance units, CBZ Life and CBZ Insurance are eyeing for regional equity expansion as the Group seeks to increase their total assets and profit contribution.
Speaking to insurance24 Group chief executive officer Never Nyemudzo said the Group was targeting at least 20% contribution of the insurance business to both total assets and profits of the Group from the current 5% and 15% respectively.
During the half year period, the Group’s insurance operations managed to make marginal profits. CBZ Insurance profit for the period H1 2017 increased to $1 mln from $700 000 in H1 2016. CBZ Life’s profit on the other hand was flat at $1.5 mln. Meanwhile the Gross Written Premium for CBZ fell by 5% at $11, 2 million during the 6 months ending June 30 2017 down from $11, 7 million during the same period last year.
Regional equity arrangements are the second phase of a regional expansion projects that started with the introduction of insurance products targeted at the Diaspora market.
CBZ Insurance introduced products such as the CBZ Diaspora Home Insurance to accelerate its GWP growth in the diaspora, and to consummate strategic decisions to enter regional markets.
CBZ intends to first step up their penetration in the United Kingdom and other markets with a high number of Zimbabweans. And then assess the feasibility of entering new markets in the region or make strategic acquisitions
“The first phase has been focusing on Zimbabweans in diaspora who have assets and interests back home that they would want covered. Next stage is going into equity arrangements, which we said under our regional expansion strategy we are looking at various jurisdictions, and the negotiations and discussions are at different stages,” Nyemudzo said.
CBZ expects to conclude these feasibility tests during the course of the year (2017).
Growth equity is designed to facilitate the target company’s accelerated growth through expanding operations, entering new markets, or