Nicoz acquires 49pc in Malawi insurer

HARARE - Listed short-term insurer NicozDiamond Insurance Limited (Nicoz) has acquired Zimre Holdings Limited (Zimre)’s 49 percent stake in Malawi-based United General Insurance (UGI) for $1,3 million.

Prior to the transaction — taking effect in January 2015 — Nicoz managed the business on behalf of Zimre, which will retain a 25 percent stake in UGI.

“The acquisition is in line with Nicoz regional strategy where Malawi had been identified as an attractive market,” said the two companies in a joint statement to shareholders yesterday.

They said the disposal would allow Zimre to realign its group assets in order to focus on the reinsurance business.

“The directors obtained an opinion from independent advisors that the terms of the transaction are fair and reasonable to both companies’ shareholders and the transaction is in line with ZSE listing requirements,” said the two.

Zimre owns a 28,58 percent shareholding in Nicoz.

This comes as Nicoz’s Mozambique unit Diamond Seguros (DS) weighed down the company’s profits in the half year to June 2014.

Albert Nduna, Nicoz chairman and also Zimre chief executive, said DS had not performed well for the period under review.

“A significant portion of the loss came from DS Mozambique, in line with expectations, as the entity’s performance is still weighed down by start-up costs,” Nduna said.

However, Nicoz posted an operating profit of $1,8 million in the period under review.

“This was a 60 percent increase from June 2013. Gross premiums declined by one percent compared to prior period,” said Nduna.

Profit after tax for the group amounted to $1,2 million, inclusive of share losses from the group’s associates amounting to $282 967.

According to Nduna, the decline in gross premiums was a result of short period policies being raised as opposed to annual premiums.

“Resultantly, a significant portion of premium was earned as at June 2014 compared to prior year,” he said.

 

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