HARARE, June 1 (The Source) – Zimbabwe’s largest short-term insurer NicozDiamond says performance for the first four months of the year is on par with last year, but future growth will be driven by greenfield projects and a strong performance by its Malawi unit.
Managing director, Grace Muradzikwa told The Source after the group’s annual general meeting on Friday that its recently launched Chengeto/Mvikeli insurance product, which is designed for low income households with premiums as low as $4 per month, had been well received by the market.
“We have not reached significant volumes yet, but we are happy with the progress we are making. We have foot soldiers in the townships selling this product. It’s been in its pilot stage but now we are happy with where we are and will soon launch a big campaign to roll it out,” said Muradzikwa.
Other products such as Christiansure, targeting churches and religious organisations and also for small to medium enterprises, have been well received, she added.
“We have more churches joining now, and contributing to our revenue,” said Muradzikwa. “We have also rolled out a product for the small to medium enterprises where we have been working with SME organisations as their preferred partner. The associations also help in collecting premiums.”
Its Malawi subsidiary, United General Insurance Company (UGI), which it purchased from Zimre Holdings in January this year, helped grow the top line by almost 50 percent, and contributed gross premiums written (GPW) of $5 million as at April while the group’s GPW as of last week stood at $16,5 million.
“UGI is a very mature and stable company and we have been managing it for many years so we are very familiar with the investment so when it came on the market we took the opportunity to buy it,” said Muradzikwa.
“We are hoping we will continue to sustain and even grow the business.”
In a trading update, Muradzikwa said the group had managed to sustain the 2014 levels, with GPW as at April 30 at $11,16 million, slightly above the $11,12 million last year.
Claims were eight percent higher on 2014, with $2,5 million paid so far against $2,3 million last year.
Expenses were flat but expenses ratio remained high as the group is still to earn most of the revenue written so far.
Its Mozambique unit, Diamond Seguros which began operations in March last year, met its revenue target of $2,3 million in the nine months of trading. As at May 22 this year, the unit had written $1 million worth of business, Muradzikwa said.
Investment performance was under pressure from softening interest rates and depressed performance on the stock market. Its residential unit, Diamond Villas had completed the first phase of 20 units which were now on sale.
“The sales have started slow but we are optimistic that with the 15-year and 20-year mortgage facilities now available to support the buyers of the units, the sales will pick up,” she said.
Muradzikwa told The Source that group will focus on capitalising its operations to boost the underwriting capacity of its units.
“At the moment we want to stabilise our current operations, making sure they are well capitalised, but that does not mean that we are not alive to new opportunities.”