The Sunday Mail
Livingstone Marufu
ZB Reinsurance, a wholly-owned subsidiary of ZB Financial Holdings, is awaiting regulatory approval from the Insurance Institute of Mozambique (ISSM) to roll out services in the Mozambique market which is considered as one of Africa’s biggest growth frontiers, a top executive has said.
The financial services group, which is set to open the branch in January 2016 and is looking to streamline its business to focus on core operations, requires an estimated $10 million to fund its forays into Mozambique.
The IMF forecasts that Mozambique’s economy will grow 7,9 percent this year.
The country was the fifth-highest recipient of FDI in Africa last year at $3,5 billion.
Investments are also expected to further grow to $9 billion next year.
It is this growth that ZB Reinsurance seeks to tap into.
Shareholders have already given the company the nod to raise the required funds.
ZBFH group corporate services head, Mr Shadowsight Chiganze told The Sunday Mail Business last week that there were a lot of growth opportunities in Mozambique.
“As updated to the media previously, we still await official regulatory response to our application although we understand that ISSM (the Mozambican regulator) does not have any objection to licensing ZB Reinsurance.
“While we wait for the regulatory authority, we are in the process of mobilising funds for the Mozambican project, which we expect to open early next year.
“We are so keen to start operations in Mozambique as we want to share the growth story with the country that is showing so much potential in all sectors of the economy and the reinsurance sector is not spared as far as growth is concerned,” said Mr Chiganze.
The expansion of ZB’s reinsurance business into Mozambique is meant to grow its revenues and help diversify its portfolio.
“As far as ZB Reinsurance is concerned, there is no delay. We are only waiting for the completion of the regulatory process.
“As previously indicated by the Group Chief Executive Officer (Ronald Mutandagayi), the project will be adequately funded for regulatory purposes and underwriting capacity requirements.
“Regarding the returns from the regional project, we are investing long term and expect optimum returns within the usual reinsurance cycle,” he said.
Despite challenges that have been faced by Zimbabwean businesses in Mozambique, ZB is optimistic that its model is feasible.
Nicoz Diamond’s Mozambican Reinsurance outlet Diamond Seguros has been raking up losses since inception, but the company is optimistic of future growth.
On the overall, ZB intends to raise $150 million to support its local operations and buttress its business.
Earlier this year, ZB group chief executive officer Mr Ronald Mutandagayi indicated that the reinsurance business contributes about 10 percent of the group’s revenue and income.
It is believed that expansion of the reinsurance business will therefore help shore up the local business.
