HomeBusiness DigestFML poised for growth — Ncube

FML poised for growth — Ncube

CM: Madam, last month Afre CEO Douglas Hoto said FML had weathered the storm created by the previous administration.  Can you enlighten our readers about what your personal vision for FML is and where you see the business going in 2012 and beyond?

RN: The Group CEO rightfully said the worst is over. FML is buoyed by the new dispensation brought about by the change in shareholder profile at group level from an individual based model to an institutional shareholder model. This is perfect for FML as it allows better access to capital needed for the company to achieve its growth objectives.

You will need to note that despite the challenges, FML managed to keep its position as the second largest life assurer in Zimbabwe, with a claim of over 16% of Gross Written Premiums. FML has also remained one of the largest and most innovative companies in funeral and individual life business fields.


We have changed the face of medical business with our Medical Savings Fund which is fast catching up with other competing health funders in terms of numbers.When I look at some listed insurance companies on the ZSE and in the region, I always have a strong conviction that FML can easily be a US$50m business, even under the current liquidity squeeze.

My dream is to see FML touching the lives of all Zimbabweans, rich or poor and those in the diaspora. This will be achieved through an array of existing, new and refreshed packages that will suit everyone in towns, rural areas, farming areas and in the diaspora. Our low income earners are the  most vulnerable to disease outbreak, droughts and are usually found exposed in times of death and grief. Our technology and innovative ideas will inevitably help us to bring affordable products to everyone everywhere at a very low cost. I want FML to change how people live.

CM: What do you see as the biggest challenge for you in achieving these goals?

RN: You will need to appreciate that our business is strongly related to what is happening in the economy and the issues to do with liquidity and low disposable incomes really affect the uptake of our products.


We are also concerned with the level of indebtedness of individuals with most people having multiple exposures with clothing retailers, durable goods retailers, money lenders and banks. Individuals now account for more than 15% of total loans from the banking sector which translate to more than US$450 million in total individual loans or US$40 per person in Zimbabwe and that is not sustainable since average salary is around US$250. Very little is naturally left to cover the most important aspects of life that is health, family and death after repayments are made to these various creditors.

We are however buoyed by the prospects that our low cost products continue to show, we are happy that our brand has remained resolute and the most attractive brand in long term insurance, we are confident that we will continue to have a share of the dollar available in clients’ pockets. Our brand, our people, our technology and our shareholders will help us in overcoming  challenges and at the end of the day the winner will be the policyholders and shareholders of FML.

CM: Traditional Life and annuity products have been a hard-sell since dollarisation due to negative perceptions after the hyperinflation era when people lost their policy values to inflation. How are you convincing customers to  buy your products again?

RN: The stability of the currency has lent a more favorable attitude towards life products like Pension and Group life assurance. The major selling point for First Mutual Life has basically been the superior positive returns of the guaranteed fund since dollarisation. We have posted returns of 59%, 24% and 24% from 2009 to 2011 which is above what our competitors have posted. You would also want to appreciate that confidence is slowly creeping back into the insurance sector and because of its strong brand, FML has been the major beneficiary of this confidence build-up as shown by the performance of our life products.

The market response since the turn of the year has been phenomenal and we believe that the correction of corporate governance deficiencies in the group and the coming in of the new GCEO has made the job easier. At FML, we do not sell life products but rather we provide cover in times of need and everyone really needs to be covered.

CM: What would you say is FMLs unique value proposition?

RN: FML, arguably, has the strongest distribution network made up of branches and agents throughout the country. Moreover, technology will further help us to reach all corners of the country and even beyond our borders. We enjoy an excellent reputation with clients and regulators and we enjoy a high reputation for quality service delivery and superior investment returns.

FML offers unique and comprehensive product solutions covering all aspects of life and our unique team made up of qualified actuaries, marketers, accountants and strategists will continue to churn out relevant products tailor-made for specific market groups. We have the best brains in the industry as demonstrated by the success of our innovative products in the market.

The FML brand has stood the test of time and we are optimistic that through exceptional customer service, the brand will keep its super brand status. In short, we allow everyone access to life insurance cover in times of need and we cover the whole body system. As a good corporate citizen we are bringing affordable products for our rural folks and low income earners.

CM: Your boss posed a challenge to stretch group performance for 2012. The larger burden of this will be borne by you as chief of FML, which is the flagship of the group. Please tell us how you are responding to the challenge?

RN: You will realise that the FML and the group as a whole posted a strong performance in 2011 despite the negative issues that dominated newspapers for the better part of the year. It’s true that FML is the largest business unit under the Afre Corporation group but you should also appreciate the strong performance posted by other units in reinsurance and property sectors and whose prospects for 2012 are very bright.

As FML, everything is well in place to meet and even surpass the targets set by our shareholders. We always strive to sweat the capital that our shareholder injects in the business and as we speak we have a number of products, projects and partnerships that will definitely deliver value in 2012 and beyond. An update on these initiatives will be provided in due course but let me emphasize that in microinsurance low cost distribution, partnerships and low cost collection methods are key. Our Medical Savings Fund is poised to reach the 100 000 members mark in the near future and we are opening medical facilities to sustain this growth, our Funeral Cash Plan offers benefits which are second to none and we are getting closer to 100 000 policyholders.

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