HARARE, June 30 (The Source) – FBC Holdings says it is awaiting central bank approval to open a reinsurance unit offshore to service its foreign insurance business to avert delays in settling external claims.
Zimbabwe is battling an acute shortage of dollars, leading to delays in foreign payments.
FBC, which operates a commercial banking and a short-term insurance business, also runs a reinsurance business which services Zambia, Malawi, Kenya, Uganda and Sudan among other countries in the region.
Chief executive John Mushayavanhu on Wednesday told shareholders at the company’s annual general meeting , that the company was under fire from foreign clients because of delays in paying claims.
“Our regional players are saying that they are not comfortable with Zimbabwe reinsurance companies because of the foreign currency problems that we are experiencing in the country,” he said.
“So we have decided to establish a reinsurance operation in an offshore centre within the African region and that is the address we will be using to write business in Sub-Saharan Africa outside Zimbabwe. The relevant approvals from the central bank are in the process of being obtained.”
Chairman Herbert Nkala said the group’s insurance arm has been granted a licence by the Insurance and Pensions Commission (IPEC) to write life and health insurance.
In a trading update for the 5 months to May 31, Mushayavanhu said the group’s profit before tax was flat compared to last year and within budget.
The group expects a better half year performance relative to last year, he added.
Operating costs remain flat compared to same period last year.
He said the banking unit improved on debt collection, with previously written off debts being recovered in the period. The insurance business was ahead of the comparable period last year but marginally below budget, he added.
The group expects a $90 million line of credit in the second half of the year from a syndicate of unnamed lenders.