Monday, April 07, 2008
NICOZDIAMOND is targeting 10 management contracts in the region by 2010 from the current five, managing director Mrs Grace Muradzikwa has said. This had been necessitated by the need to hedge the business against the country’s inflation by increasing foreign currency earnings. Overall, the group’s foreign earnings totalled US$250 000 in the last earnings period with Mrs Muradzikwa saying there was future growth potential.
The management contracts at Cavmont in Zambia and UGI in Malawi were performing well. The company had been cleared by the Reserve Bank of Zimbabwe and the Commissioner of Insurance to allow clients with free funds to take out insurance policies in US dollars.
Just like Zimnat, NicozDiamond was considering offering clients US dollar policies, which would be backed up with assets in external operations.
The group was indexing policies against the dollar, which Mrs Muradzikwa said would be revalued monthly, with the obligation on the client being to agree with "what they think is reasonable" in terms of the exchange rate.
In its financial performance for the December year end, the group reported an underwriting loss of $1,21 trillion largely on the back of losses of $1,255 trillion at Fico in Uganda.
The group said the main drivers were the expenses and "significant claims as there were elections there." Mrs Muradzikwa, however said steps had been taken to align those costs.
Furthermore, the retention ratio had fallen to 44 percent from 60 percent and was below the local market average of 53 percent.
Mrs Muradzikwa said the main reason was that "some clients were switching to foreign currency policies".
NicozDiamond controls the local market share of short-term insurance companies at 27 percent with the second company Zimnat at just below 20 percent. Overall, the top six companies control 80 percent of a market with 21 players.