Wednesday, November 5, 2008

Zimbabwe: Zimre Holdings Acquires Insurance Firm in Zambia

Walter Muchinguri,The Herald (Harare)17 April 2008

Diversified Group Zimre Holdings Limited is set to consolidate its presence in Zambia after acquiring an insurance company in that country.

It recently acquired Cavmont Insurance for US$1 million. The money was divided between the cash consideration of purchasing the company and funds for capitalising its operations.

The purchase was funded mainly through Zimre's other regional operations. Zimre Holdings group chief executive Mr Albert Nduna said while Cavmont was currently the smallest insurance company in Zambia, plans were afoot to turn it into a major force in that country's insurance sector. He said Zimre Holdings would seek to go the same route that they took NicozDiamond, which was transformed from a minow in the local insurance industry, to become the leading insurer in the country presently. Zimre Holdings first entered the Zambian market through its subsidiary, Zimre Zambia in 1996. Zimre Zambia is primarily involved in reinsurance business and is the only resident reinsurance company in that country. The company was also established to oversee and manage selected regional investments. Zimre Holdings' regional operations have continued to pay off for the Group, accounting for 80 percent of income.

Earnings from the group's regional operations moved from 38 percent of the group's overall income in 2006 to 80 percent last year while earnings from local operations declined from 62 percent to 20 percent. Gross premiums from the regional operations rose from US$10 million in 2006 to US$14 million last year. Mr Nduna said the increased contribution of the regional operations have helped the group to wither the storm locally given the challenges that are being faced by its local subsidiaries due to the challenging economic climate in the country.

Zimre's chief operating officer, Mr Solomon Tembo said the group had managed to capitalise on its regional operations to pay off additional acquisitions. Apart from Zambia, Zimre Holding is also present in South Africa through Southern Union Reinsurance and in Mozambique through Zimre Mozambique. It also has operations in Uganda, Angola and Malawi where it has a controlling stake through its subsidiary United General Insurance.