ZB eyes Mozambican insurance market

Golden Sibanda Senior Business Reporter
ZB Financial Holdings has applied to regulatory authorities in Mozambique seeking approval for the establishment of a reinsurance business in the fast growing economy.

But the financial services group faces a herculean task raising the requisite finance for the initiative, including mobilising $150 million to support domestic operations.

Chief executive Mr Ron Mutandagayi said in an interview on Friday that they were awaiting the decision of regulators on their application, to proceed with the plans.

“Applications have been made with various regulatory authorities in Mozambique, we are just waiting for approval. Once approval is obtained we will be up and running,” Mr Mutandagayi said after ZB’s annual general meeting.

But the financial services group, looking to streamline its business to focus on core operations, needs to raise about $10 million to fund the initiative.

Mr Mutandagayi said last year that $2 million had been committed to the efforts of spreading ZB Reinsurance’s tentacles into the Mozambican market.

He expressed hope this will be achieved during the course of the current financial year.

A general meeting of shareholders last year gave directors permission to seek funding amounting to $150 million to support operations and recapitalise the business. But ZB has not been able secure interested suitors.

Mr Mutandagayi said the group was looking at a combination of equity and lines of credit to bolster operations and fund growth in a very illiquid economy.

“We have not yet been able to get money into the business, we still looking for funding and as soon as we are find to find an investor we engage them.

“We have courted anyone and everyone who has got funding. We have engaged a number of financial advisors who are assisting us with the fund-raising so we are waiting for anything positive out of those fund-raising,” he said.

Mr Mutandagayi said expansion of the reinsurance business’ footprint into the region was important to grow ZB’s revenues and diversifying its portfolio.

“It is very important, at the moment it contributes about 10 percent of our revenue and income, but if we are able to expand it that will obviously assist us in shoring the local business, it is an important part of the group,’ he said.

The ZB chief said they were going into Mozambique because it was a fast growing economy and they wanted to be part of the existing opportunities arising there from while diversifying the business and expanding organically.

This comes as ZB sought to stymie revenue trends that seemed to be tapering off. As such, ZB instituted cost containment by exiting non-profitable operations and streamlining the head count, which has started paying off.

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