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ZB Reinsurance, a wholly-owned subsidiary of ZB Financial Holdings, has struggled to underwrite meaningful business in Mozambique due to instability in that country.
The company got the all-clear to roll out its services in Zimbabwe’s neighbour from the Insurance Institute of Mozambique in January 2016 but business has been low.
The IMF forecasts Mozambique’s economy to grow by 5,5 percent this year spurred by growth in FDI to US$9 billion.
It is this growth that ZB Reinsurance wanted to tap into but political instability fuelled by Renamo bandits in that country and other financial challenges have hampered viability.
ZBFH group CEO Mr Ron Mutandagayi told The Sunday Mail Business last week that despite meeting all regulatory requirements, and putting up the required US$10 million to start business in Mozambique, “we haven’t done extremely well to justify our presence in that country”.
“Our reinsurance outfit has been writing business in that market from Zimbabwe for a while but we haven’t done good enough as we expected to have done by now. We continue to hang in there but it has not been extremely well due to circumstances beyond our control.
“Our underwriting dividends are not satisfactory so to speak but we will continue to monitor the situation,” said Mr Mutandagayi. Regardless of the current challenges in Mozambique, ZB remains optimistic that its model is feasible.
Another Zimbabwean insurer, NicozDiamond, is present in Mozambqiue through Diamond Seguros and has also been accumulating losses. Mr Mutandagayi said they will not rush into yanking the Mozambique operations.
“Our idea is not just to put up structures there but to ensure that we appropriately position our reinsurance operation in order to take up opportunities more efficiently. We are hoping for a quick change in the market,” said Mr Mutandagayi.
ZB reported a 22 percent increase in profit to US$11,43 million for the year ended December 31, 2016 on the back of robust bad debt recoveries, growth in non-funded income and positive fair value performance in listed equities.
Revenue amounted to US$65,07 million representing a 12 percent increase from same period in 2015.