Inflationary pressures in Zimbabwe are on the rise, Zimnat General Insurance MD Stanley Mazorodze (SM) says. Last week, Mazorodze (pictured) spoke to Zimbabwe Independent business editor Chris Muronzi (CM) about the business and the future. Below are excerpts:
CM: Last week, you rebranded Zimnat to reflect the shareholder changes in the company. What necessitated this change?
SM: The change was necessary to communicate to the market and to our customers our partnership with the Sanlam group which for them is the confidence in dealing with an organisation that has a solid international financial backing and a commitment to customer experiences of international standards which will give unprecedented service, great value and peace of mind.
CM: Have you benefitted from the Sanlam brand?
SM: For our businesses, Sanlam’s experience in emerging markets has brought to us huge opportunities for growth.
CM: Your competition spoke of rising inflation fears and the need to preserve value in the wake of economic fundamentals signalling a possible return of inflation. What are you doing to preserve value in the wake of inflationary fears?
SM: It is indeed true that inflationary pressures are rising. Key to mitigate this lies in an investment strategy that recognises value preservation and at the same time easy enough to translate into liquidity to ensure continuous and valuable service to our customers.
CM: Are you feeling these inflationary pressures in the economy?
SM: We are feeling the pressure on our expenses, particularly on our claims costs.
CM: How much do you have in investments?
SM: The investment portfolios are held independently by each entity and as a group and I do not have the figures on me.
CM: Of this, how much is in monetary assets, property assets and prescribed assets?
SM: The balance of our assets are regulated by the Insurance and Pension Commission (Ipec) and as such the composition of our assets is in line with the Ipec guidelines for permissible assets and also prescribed assets.
CM: How was business in the first quarter?
SM: All our operations were profitable, albeit under significant pressure on revenues and cashflows.
CM: Are you concerned with developments on the economic front, especially given the inflationary outlook?
SM: For us it is a choice to do business in Zimbabwe and we have since our inception in 1946 weathered a number of storms, we have throughout this long history consistently protected assets of Zimbabweans, managed their wealth and ensured that their assets and funds are passed on to future generations.
The Zimnat motto inculcates who we are, that is “Making life better”. This philosophy within the group and its purpose is to help clients better their means, to assist in times of difficulty and to provide a reliable, safe haven for funds and assets. In short, our investment in Zimbabwe is for the long-haul and challenges are part of business.
CM: Do you think you are better prepared to deal with an economic downswing?
SM: We choose at this juncture to remain positive, understanding that there is a need for our product, our homework always is to challenge ourselves to provide this need to the Zimbabwean market notwithstanding the economic conditions.
CM: You said Sanlam acquired a 40% stake for US$11 million? Does this value the business around US$26,5 million?
SM: Sanlam acquired an effective 40% stake in the Zimnat group for US$11,6 million at the end of 2015. This valued the Zimnat group at US$29 million at the time that the transaction was negotiated.
CM: What is your market share?
SM: We were ranked fourth by revenue and second by profitability as per the last Ipec report (December 31 2016).