Zimre eyes NIgeria's $1.5bn insurance market

ZIMRE Holdings Limited (ZHL) is seeking partners and has set its eyes on Nigeria’s $1,5 billion insurance sector, an executive said last week.

NDAMU SANDU
CHIEF BUSINESS REPORTER

ZHL chief executive officer Albert Nduna said the investment holding company would look for partners in entering the Nigerian insurance market.

“We are not believers of 100% [shareholding]. We want to go to Nigeria and have identified people who have $100 million. They want somebody who runs. We bring a bit of capital and management. We say we are there, use us,” he said.

Nigeria has a minimum capital requirement threshold of $20 million for insurers.

Africa’s biggest economy has growth potential, but investors need to be deep pocketed to gain a foothold in the insurance sector.

According to statistics, the Nigerian insurance industry grew by 15% last year. Yet it has a penetration ratio of 0,5%. This, according to Nduna presents opportunities.

Nigeria has 42 non-life insurers, 585 insurance brokers and two reinsurers.

ZHL has operations in Zimbabwe, Zambia, South Africa, Botswana and Uganda. Nduna said the group was looking for opportunities on the continent.

Nduna said the group was optimistic that the disposal of non-core assets would be concluded soon to raise money to recapitalise the group’s operations.

In addition, a capital raising exercise was also underway to give operations more underwriting capacity.

Nduna said in the insurance sector size matters.

“You can’t be a small player. You find that people you are giving cover are bigger than you,” he said adding that local players should consolidate to build stronger institutions.

“Our wish is consolidation. Out of nine there should be not more than five or four reinsurers.”

Nduna said those that want to partner with ZHL operations should come as size matters and gives more capacity to clients.

In the half-year ended June 30 2014, ZHL slipped to an after tax loss of $0,11 million from $2,39 million in the same period last year.

ZHL said its share of the loss on agro industrial associate operations of $1,01 million had a negative impact on the overall performance of the group.

Nduna said the figures in the three months from June were not looking good, but the group was looking for a rebound in investment income.

“On the operational side, the premiums are not increasing as we would have liked. It’s guarded optimism that we have so that we succeed on investment income. We wouldn’t want a loss at the end of the year. We want a profit,” Nduna said.