Emeritus to provide offshore capital for ZHL

HARARE - ZIMRE Holdings Limited (ZHL) says the consolidation and restructuring of its reinsurance operations under Emeritus Reinsurance is expected to provide a vehicle to mobilise offshore capital required to strengthen operations and embark on regional expansion.

ZHL chairperson Ben Kumalo said the rebranding of Baobab Reinsurance to Emeritus Reinsurance was reflective of the firm’s new strategic thrust.

He said the ZHL subsidiary will be used as a vehicle to mobilise international capital required to also enhance credit ratings and advance the group’s domestic footprint.

Going forward, Kumalo said ZHL anticipate growth in disposable incomes and consumption trends of both low to middle income classes thereby leading to increased demand for discretionary products such as insurance.

“In the short term, the group’s strategic focus will be to continue consolidating and strengthening its insurance and property business from internal resources for growth cash generation and profitability,” he said in a statement accompanying the group’s financial results for the year to December 31, 2017.

“In the medium to long term, Emeritus International Reinsurance Company will provide a vehicle to mobilise offshore capital required to strengthen operations and embark on regional expansion.”

Kumalo noted that the consolidation and restructuring of the group’s reinsurance operations under Emeritus Reinsurance gained further momentum following the issuance of exchange control approvals in some jurisdictions to transfer assets to Botswana.

“The monolithic rebranding of the reinsurance operations under the Emeritus Reinsurance banner is currently in progress,” he said.

The business initiative is expected to strengthen the market position of the reinsurance operations and position them for growth as well as allowing the operations to benefit from economies of scale and scope.

“The Emeritus International structure will enable the group to raise offshore capital required to strengthen the capital base of the group reinsurance operations and for business expansion,” he said.

ZHL recorded a profit of $5,8 million for the year to December 31, 2017  a 500 percent increase from a loss of $1,5 million suffered in 2016.

The profit was bolstered by the group’s decent out-turn from the domestic reinsurance and property subsidiaries.

Total income increased by 20 percent from $30,9 million in 2016 to $37,2 million in 2017 mainly due to improvement in revenue from property sales at ZimRe Property Investment Limited and steady recovery in the core reinsurance operations due to the ongoing restructuring exercise growing market confidence and improvement in underwriting standards.

— The Financial Gazette

 

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