NicozDiamond enters Mozambique

HARARE - Listed short-term insurer NicozDiamond Insurance Limited (NicozDiamond) plans to establish a Mozambique operation as part of efforts to penetrate regional markets and diversify income streams.

“We are expecting our operating licence in Mozambique this year,” said Grace Muradzikwa, NicozDiamond chief executive.

She said the group had done all the necessary paperwork and was ready to open shop.

NicozDiamond — which has significant interests in insurance and property locally — already holds risk management and technical services agreements in Malawi, Zambia, Angola and Uganda.

Muradzikwa told analysts yesterday that there was a sign of growing confidence in the insurance industry, as indicated by NicozDiamond’s gross premium growth in the full year to December 2012 by five percent to $24,8 million from $23,6 million recorded prior period.

During the period under review, the insurer’s total assets increased to $25 million from $22 million prior year.

Muradzikwa said in 2012 the group sustained the profitability trend that started in 2011 from both insurance underwriting and investments.

“Overall, the group made a profit after tax of $2,43 million for the year 2012, a growth of 45 percent on 2011,” she said.

Nicoz’s basic earnings per share surged to 0,43 cents against 0,29 cents prior year comparative.

The group statement of financial position grew by 13,7 percent and 9,3 percent for the company. The capital at $8,9 million for the company was well above the new minimum capital requirement of $1,5 million.

Muradzikwa said Reinsurance was higher in 2012 due to strategic review of treaty programmes to cushion the company following bad claims experience in 2011. The overall claims experience, however, turned out to be much better than prior year as evidenced by the group’s gross claims which declined six percent.

“While the Uganda operation made an underwriting loss of $259 252 having suffered a bad claims cycle, Zimbabwe on the other hand made an underwriting profit of $367 039,” she said adding that this resulted in an overall underwriting profit of $107 797.

Muradzikwa hinted that plans are at an advanced stage to recapitalise the Uganda operations.

“We have taken a decision to invite local investors into First Insurance Company (FICO) and we hope this move will make the unit more competitive and strategically position it to acquire significant new business,” she said.

The group’s investment performance for the year was encouraging as the investment returns improved by 49,8 percent to $1,97 million.

Muradzikwa said the property companies made good operating profits with their head office contributing 45 percent of the investment income.

“NicozDiamond contributed 48 percent while FICO and Marabou contributed the balance of seven percent. The work done on the buildings saw an increase in their valuation averaging 23 percent from the 2011 values,” she said.

Zimbabwe’s insurance industry nearly collapsed in 2008. Hyperinflation wiped insurance companies’ capacity to settle claims while corporate and individual policyholders were forced to review their positions following the liquidity challenges to cater for their immediate concerns at the expense of insurance risk cover.

But the steady growth registered in the economy in the past four years, driven by the changeover to more stable currencies and the consummation of the inclusive government has influenced more companies to sign up for insurance.

Muradzikwa said Nicoz’s policyholders grew from 4 564 in 2009 to 28 348 by December 2012.

For the second time since dollarisation in 2009, NicozDiamond declared a final dividend of 0,064 cents per share. The company will in total pay-out $362 149 to shareholders. - John Kachembere

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