Kudakwashe Mhundwa Business Reporter
Financial services group Zimre Holdings Limited intends to expand its footprint in the region after receiving exchange control approvals for the establishment of a reinsurance company, Emeritus International Reinsurance Company Limited in Botswana.
Emeritus International Insurance Company Limited is an off shore structure registered under the Botswana International Financial Services Centre, which will house all of ZHL’s regional operations.
“This development facilitates that operationalisation of the structure thus paving way for raising the critical funding for the group`s reinsurance operations from the Botswana base,” said ZHL chairman Benjamin Khumalo in a statement accompanying the group’s financial statements for the year to December 31, 2016.
He said losses are narrowing at the group’s agro-processing unit CFI Holdings with some operations having already registered a turnaround in profitability.
Mr Khumalo said the 2016 /2017 agricultural season is expected to further enhance the performance of the associate’s agro-based units.
On the financials, ZHL recorded a 90 percent improvement in net loss to $2,2 million from $23,1 million posted in the same period the prior year.
Mr Khumalo said progress witnessed during the period under review was due to a number of factors including measures taken by the group to ensure sustainability and efficiency.
“The improvement was mainly due to increased business retention, favourable claims experience, the positive impact of the group restructuring and cost cutting measures being implemented and reduction in share of losses from associates,” said Mr Khumalo.
The group’s total income for the year dropped 14 percent to $28,1 million largely due to an 18 percent decline in gross premium written.
Net premium earned which contributed 77 percent to a total income decline by 8 percent from a restated $23,8 million in 2015 to $21,8 million in 2016 mainly due to obtaining soft domestic insurance market and weak local currencies in our major regional markets of Mozambique and Malawi.
Profit for the year for the regional reinsurance business cluster was $0,4 million a decline from $1,3 million achieved from the same period in 2015, while the domestic reinsurance business achieved an improvement in performance as operating expenses narrowed to $0,7 million from an operating loss of $4,8 million in the prior year.
Mr Khumalo said that their focus this year was on mobilising financial resources and positioning the group for sustainable growth and exposition.
The group did not declare any dividends due to overall losses posted in the trading year.