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Business Reporters
Zimbabwe’s leading reinsurance company, Zimre Holdings Ltd is considering offloading its stake in Malawi-based United General Insurance Company (UGI), to its subsidiary NicozDiamond. Sources close to the deal said it was only logical to sell to NicozDiamond since it has been managing UGI on behalf of Zimre Holding. Zimre holds a 74 percent stake in the Malawian insurer.

Another source said that NicozDiamond would be more suited to owning the business as both are in the same line of business.

“NicozDiamond and UGI are both short-term insurers so the former understands the business better and it’s only sensible that they get the stake,” said the source who preferred to remain anonymous.

NicozDiamond has already indicated its intention to expand into the region after it recently ventured into Mozambique.

Incidentally Zimre Holdings is also present in Mozambique through its wholly owned subsidiary Zimre (Malawi), which owns 51 percent of Zimre Mocambique.

The minority shareholders are Continental Reinsurance of Nigeria (19 percent), the Mozambican government’s institute for managing state holdings, IGEPE (20 percent), and the public owned insurance company EMOSE (10 percent).

NicozDiamond and Zimre Holdings Limited issued joint cautionary statements advising shareholders that they were in negotiations for a disposal and acquisition of a business respectively, which if successful will impact on the value of their shares.

UGI is one of Malawi’s leading insurers and has been in operation for over 30 years. The company’s head office is in Blantyre and it has two branches in Lilongwe and Mzuzu with a staff complement of 40.

Day-to-day business operations are managed through four strategic business units three of which are in Blantyre and one in Lilongwe. Each unit is responsible for its own underwriting, claims servicing and credit control.

UGI exclusively deals in short-term insurances as opposed to life assurance. It provides cover for all types of property such as motor vehicles, buildings, computer equipment, etc including liability insurance.

NicozDiamond, which is the largest short-term insurer in the country, recorded a 60 percent increase in profitability in the interim to June 2013.

After-tax profit was US$1 million from US$654 000.

The contribution of associates to after-tax profit increased by 42 percent during the period under view to US$242 440 compared to the same period last year.
The group’s before tax profit also leapt a massive 70 percent to US$1,4 million compared to US$852 000 achieved in the 2012 interim period.