New acquisitions drive Zimre quarterly revenue
ZIMRE Holdings says its reinsurance and reassurance cluster posted impressive growth in insurance contract revenue during the quarter ended September 30, 2023, after 129 percent to $61,4 billion driven by new business acquisitions through various developmental projects in the local market.
Ruvimbo Chidora, the group company secretary, said the regional operations' strategy to participate in targeted external markets and big accounts paid off, contributing to this jump in insurance contract revenue for the period.
“The hybrid business model employed by the short-term insurance cluster has begun to register an increase in direct business composition from 33 percent to 58 percent as of September 30, 2023.
“This increased the underwriting capacity of the operation and expedited the insurance contract revenue growth by 72 percent from $1,8 billion to $3,1 billion in the current period in inflation-adjusted terms,” she said.
She noted that the historical cost of insurance contract revenue grew by 590 percent to $2,1 billion from $303.0 million in the same period prior year.
During the quarter under review, the retention ratio also improved to 71 percent against the prior period ratio of 51 percent.
Ms Chidora said the group’s property market continued to be the most sought-after investment option due to its value preservation qualities as a good hedge against inflation. She said this saw the property cluster posting 493 percent growth in rental income in inflation-adjusted terms to $8,9 billion from $1,5 billion compared to the same period the prior year, and in historical terms, an 846 percent growth from $433,2 million to $4,1 billion recorded in the current period.
“Notwithstanding the difficult operating environment, monthly collections for the portfolio for the period under review averaged 90 percent, with an average portfolio yield of 7 percent,” she said.
She added that despite the prevalence of workspace rationalisation and optimisation by a significant number of office tenants, portfolio voids averaged 23 percent compared to 22 percent in the same period prior year.
The group’s insurance broking business continues to be a trusted business partner, recording a 509 percent growth in brokerage income in inflation-adjusted terms from $755,3 million to $4,6 billion in the current period, driven by an increased business renewal rate.
Ms Chidora said to ensure its progress is continuous, the company is restructuring and building capacity for organic growth through the introduction of new businesses such as employee benefits, healthcare, and diversifying its agricultural offerings.
The Life and Pensions insurance contract revenue grew by 212 percent in inflation-adjusted terms from $2,5 billion to $7,8 billion in the current period, and the growth was on the back of increased uptake of the company's insurance products by the market.
She said the Vaka Yako product was the major contributor to Individual Life Premium at 83 percent, the product is one of the best-performing products in the cluster, and the unit has more innovative and customer-centric products in the pipeline.
Ms Chidora said the Wealth Management cluster remained resilient in the wake of the turbulent operating environment, and as part of a broad strategy to hedge against inflation, one of the units has diversified into the region with the aim of widening its revenue streams.
The group’s funds under management increased by 32 percent compared to the prior year to $547,8 billion.
Looking ahead, Ms Chidora said Eastern and Southern Africa were projected by the World Bank to experience 3,9 percent gross domestic product (GDP) growth next year, and in line with this projection, the ZHL Group intends to solidify its regional investments and improve underwriting capacity.
She said that through the operationalisation of Emeritus International, the group will be pursuing new markets within the region, further hedging Zimbabwe's country risk.
Ms Chidora noted that the group is progressing its infrastructure and landmark development drive with projects that will introduce innovative green practices to the country while creating sustainable value for both shareholders and communities.
“In 2024, the Group looks forward to proactively pursuing its growth triangle of cash, change, and customer on the back of its recently adopted Eagle Culture,” she said.