‘Zimre strategy still anchored on creating strong cash wallet’

Zimre Holdings (ZHL) says its strategy remains anchored on delivering a strong cash wallet by driving a cost-effective insurance float and increasing the contribution from regional investments.

ZHL is a diversified investment holding company with core competencies in insurance and property. The company has investments in Zimbabwe and the Southern African region.

Mr Stanley Kudenga, ZHL group chief executive officer, told analysts last week that the group would increase the contribution from its regional investments by upscaling their balance sheets and effective deployment of competitive capital across all strategic business units.

He said the group would also tilt its property portfolio towards high yielding commercial and retail sectors through near liquid investment structures.

“We had an independent actuarial assessment of the depth of the markets that we operate in and the level of competitive capital that would be required and they came up with a figure of US$12 million.

“Out of that US$12 million, we have already internally deployed about US$7 million and the remaining US$5 million will need to go into Malawi and Zambia,” he said.

In Zambia, Mr Kudenga said there was now a requirement for foreign companies to have local participation at the shareholding level of least 25 percent.

As a result, Mr Kudenga said ZHL was looking at doing some kind of a rights issue where it would then cede its rights to selected investors in the local market, which means that there was capital in the local market.

“Malawi is almost the same thing but by and large we are also looking at complementing it from capital from the local market,” he said.

Mr Kudenga said the group’s cash generated from operations for the year to December 31, 2023 increased to US$13,67 million from US$8,9 million in 2022 in line with the group’s cash wallet model.

During the period under review, 84 percent of the group’s revenue was US dollar revenue and all business units generated positive cash flows.

ZHL chief finance officer Mr Zvenyika Zvenyika said insurance contract revenue increased by 7 percent to US$62,68 million in 2023 compared to US$58,58 million in 2022.

He said the strong top line growth was underpinned by local reinsurance and pensions business operations.

The local reinsurance cash contribution was US$1,796 million, Life and pensions US$4,943 million, reinsurance foreign US$3,542 million and property US$2,203 million.

“Healthy total income surge was driven by expansion into new markets, introduction of innovative product offerings, new business acquisitions, increased business support, and positive investment income returns,” said Mr Zvenyika.

He noted that total expenses were kept under check following the strategic underwriting decision to reduce participation in loss making portfolios and a decline in climate change induced cyclone related claims.

Mr Chakanyuka Nziradzemhuka, the chief operating officer said the group completed the balance sheet reorganization of Emeritus International Re in Botswana which serves as the backbone of ZHL’s Great Africa Trek.

He said the group was exploring new opportunities in Tanzania, Ghana and Uganda.

“The group successfully enhanced the Emeritus Re Mozambique balance sheet with a US$2 million capital raise that increased underwriting capacity,” said Mr Nziradzemhuka.

As the group’s property portfolio tilted towards high yielding commercial and retail sectors through near liquid investment structures, its Eagle Real Estate Investment Trust (REIT) attained Prescribed Asset Status from the Insurance and Pensions Commission of Zimbabwe (IPEC) post the reporting period.

Mr Nziradzemhuka said it is anticipated that the Eagle REIT will bring much needed liquidity to the real estate market especially for Zimbabwe’s pensions community.

“The Eagle REIT project has been ably supported with one project already underway in Mazowe which is at 13 percent completion.

“In Victoria Falls we successfully acquired land and title and the group further extended commitment to the town by securing a refuse truck propelling high standards,” he said.

He added that the group will continue to consolidate on its experience and dynamism to enhance market share acquisition through innovations and new tools that embrace customer centric ecosystems which will create new value and change for its stakeholders.

During the year under review, the group’s profit increased by 321 percent from $72,4 billion to $304,9 billion in inflation adjusted terms and a 767 percent growth under historical cost terms, soaring to $528,1 billion.

The group’s total assets uplifted by 81 percent to $1,180,2 billion from $650,5 billion in inflation adjusted terms and in historical cost total assets grew by 769 percent to $1,151,6 billion from $132,5 billion buoyed by growth in investment properties and equity investments which constituted 70 percent of total assets.-herald