AS Zimbabwean insurance companies increasingly find it prudent to establish offshore operations in a bid to offset nostro challenges, a Botswana-based insurance company, First Sun Alliance with global reach has set base in Zimbabwe as it seeks to grow its market. Zimbabwe Independent reporter Melody Chikono (MC) caught up with First Sun Alliance chief executive officer Paul Chitate (PC). Below are the interview excerpts:
MC: What are your major priorities in Zimbabwe and where do you expect growth?
PC: We prioritise market leadership on the insurance industry through innovative product design and delivery, specifically on the areas of national focus. These are agriculture and mining.
We are coming on the back of a very wide international network arrangement which will allow us flexibility to source international reinsurance support on specific risk coverage that may not be readily available on the Zimbabwe market.
Our alliances with global market leaders such as Jardine Lloyd Thompson (JLT), a British multinational corporation that provides insurance, reinsurance, employee benefits advisory and brokerage services, provides a window of international best practice and expertise that First Sun Alliance has tapped into to come up with a wide range of specialist product offering.
These products include professional indemnity for a wide range of professions such as accountants, lawyers, engineers, financial advisors, architects, contractors, you name it. We also have specialist products such as crisis management policy for expatriates, specie insurance for art galleries, museums and fine art exhibitions.
In addition to that, we have political riot cover, bloodstock insurance for your horses and livestock comprehensive insurance. Of late, we have cured most farmers’ headaches by coming in with insurance cover for epidemics in cattle, that is foot and mouth and anthrax. These have previously been treated as exclusions by the local players.
A huge take up of this product line particularly by the dairy farmers through the Zimbabwe Association of Dairy Farmers has been experienced, which is really commendable for us as a country if we are to achieve our desired milk production targets.
MC: First Sun Alliance Insurance Brokers has been in Botswana since 1999, can you tell us why you would come into Zimbabwe at a time when other insurance companies are strategising establishing offshore operations due to nostro issues in the country?
PC: We have already been offshore, so the other companies are actually following in our footsteps if they are going out now. There is renewed hope for Zimbabwe and we have never been wrong with our instinct, this is the time to come and establish in Zimbabwe.
We are in for good business prospects. We have gone out of the borders and managed to build an empire, a trusted brand in our neighbouring country (Botswana) and we are in the process of establishing our presence in South Africa. So we have seen it befitting to trace our roots back to Zimbabwe, our home and there is no better timing for this move. We wish to consolidate our position as a regional financial services brokerage hence this timely expansion.
MC: I understand First Sun Alliance went through unbundling in Botswana and is coming to Zimbabwe after that unbundling. What does that do to the shareholding and structure of the company?
PC: Not unbundling as such, but First Sun Alliance entered into a strategic citizen equity inclusion set up. First Sun Alliance has now assumed a regional growth strategy, which involves the equity participation of citizen players in the countries we are to operate.
This way, we will leverage on the presence of locals within our structures both at corporate level as well as management level to participate in public tenders in the respective countries that we will be operating in. This set-up will also improve the company’s corporate citizen status, as it would have embraced the societal and cultural norms for it to operate efficiently.
MC: What’s your view of the insurance market in Zimbabwe? Do you think it offers a level playground?
PC: It does, there is no doubt even under the current depressed situation that the Zimbabwe insurance market still leads the region on both legislative and professional conduct. Zimbabwe, without doubt, provides a very high percentage of the qualified leaders of the insurance industry. Our presence in Zimbabwe now puts us in a better position as the country opens up to the international community, we foresee a situation where the cake will be big enough for all players to have a fair share, albeit depending on their service and product offering.
MC: Given a chance to change something in the industry, based on your offshore experience, what would you change in the Zimbabwean insurance industry?
PC: Licensing requirements, especially for insurance brokers, they are rather too stringent.
I would suggest the regulator treats each application based on its own merits. As for the underwriters, a risk-based capital arrangement would better suit this economy. A one-size-fits-all approach has its demerits, considering the state of the economy.
MC: How do you see First Sun Alliance in Zimbabwe in terms of revenue and market share?
PC: There are good prospects. We are not necessarily going to be driven by market share but by our own cost-benefit targets going forward. As our operations grow, much emphasis is on our brand at the moment. First Sun Alliance should be a household brand when it comes to insurance. The revenues will definitely follow after there has been brand acceptance and that is our priority now.
MC: Tell us about your footprint and you intentions concerning expanding it.
PC: We have always been a composite financial services brokerage focussing on the recruitment and training of staff towards excellence. We intend to expand our footprint at the back of high-tech e-marketing platforms which we have already created and ready to roll out. These platforms will enable easy and quick access to our products for the convenience of our clients.
MC: Is there a chance for mergers or acquisitions of entities in Zimbabwe?
PC: No, our focus is on regional growth, Botswana will remain our regional administrative centre and Zimbabwe will stand as our technical and manpower hub. We are already finalising the revival of our licence in South Africa and are planning to spread to Namibia, Zambia, Mozambique and Swaziland in the near future.
MC: What can you say about insurance risk in Zimbabwe?
PC: Risk is risk, everywhere it’s the same. It all depends on how you underwrite it. It varies on the class of risk. Long-term insurance, for obvious reasons, is not covered at all. There is lots of scope there. Short term is directly affected by the economic situation and by it operating at way below capacity it means as the economy improves business should also increase, tenfold I am sure.
MC: If you were to compare the level of insurance scams in Zimbabwe and other country, what would you say?
PC: I have not experienced insurance scams yet but have not heard of anything alarming at all. Not able to compare with anyone really.
Fact File: Paul Chitate
- Founder of First Sun Alliance (Pvt) Ltd;
- Years of experience in both long-term and short-term insurance;
- Holds diploma from the Institute of Bankers;
- Holds honours degree in Business Studies (Marketing);
- Associate and fellow of the Insurance Institute of South Africa (IISA); and
- Held positions of responsibility at Old Mutual Zimbabwe, Zimbabwe Insurance Brokers, Corporate Insurance and Omega Insurance Brokers which he left in 1999 to form First Sun Alliance.