REINSURANCE giant Zimre Holdings Limited (ZHL) has made significant strides towards development of micro insurance with new products under the company’s portfolio expected to hit the market this year, CEO Albert Nduna said.
In an interview with businessdigest, Nduna said the group had embarked on a pilot project three years ago to develop micro insurance products with the aim of protecting the low income bracket and the rural communities against specific perils.
The project has seen the company develop tailor-made insurance products that suit the circumstances of the rural economy.
“The pilot project showed that there is need for insurance in that sector and what companies and people have done is to transplant a big product and take it to Murehwa or Plumtree,” Nduna said.
Nduna said in terms of potential products, Zimre was looking at providing life covers, property covers, and agriculture covers under its micro insurance portfolio.
“Agriculture is a difficult product but we believe with improved scrutiny on products that are offered as agriculture insurance, we can come up with a win-win situation where our farming communities are looked after, where the lenders of money to the farming communities are looked after and insurers are also viable,” he said.
Micro insurance is expected among other innovations meant to improve operations.
In the first quarter of 2013, Zimre’s operating profit grew 38% to US$1,9 million while comprehensive income grew 553% from US$261 000 to US$1,7 million.
In a trading update last week, Nduna said the increased profitability arose from continued cost control measures across the group and improved collections.
“The focus of the group is to write profitable and collectable business to minimize provisions this year,” he added.
However, the group reported a 24% decline in gross premium income in the first quarter of 2013 compared to the same period last year owing to continued devaluation of the Malawian Kwacha and cancellation of bad business in Zimbabwe.
Nduna said gross premium reduced slightly in Zimbabwe due to strong selection including cancellation of bad business.
“Malawi operations registered negative growth in US terms from US$7,9 million to US$4,7 million due to the continued devaluation of the Malawi Kwacha against the US$ from MK290 in December 2012 to MK 390 in March 2013,” he said.
Nduna said Malawi has over the years been the best performing market, commanding 30% of group business.
“We are encouraged by the improvement in the Malawian economy which has seen the exchange rate improving from an all time high this year of MK414 to the current MK330 to the US$,” he added.