ZSIC leans towards agriculture as it repositions its business
By Charles Mangwato
Mon 21 June 2010, 04:01 CAT
ZAMBIA State Insurance Corporation (ZSIC) Group of companies says it will position itself strategically so that it is not only an insurance company but a partner of all sectors in economic development.
ZSIC Group managing director Irene Muyenga said the company would particularly support the agriculture sector because of its crucial role in economic growth. Muyenga was speaking in Choma on Saturday at a cocktail party hosted for the farming community in the district.
She said as part of the strategic focus, the company would in the next five years provide adequate insurance for the rapidly developing sectors of the economy, especially agriculture.
Muyenga said agriculture had been a very strategic area of business and ZSIC would provide insurance products that would meet specific insurance demands of the farming community at competitive rates.
She said the company’s priority was prompt payment of claims within the stipulated time once a claim was lodged with ZSIC.
“I am aware that sometimes we may take long to make payments, but I would like to positively assure you that your business with us is soundly safe and we shall definitely be able to pay you,” she said.
Muyenga said ZSIC Group’s asset base could not be compared to any other insurance company in the country.
She further claimed that ZSIC Group was probably the only insurance company that returned most of its re-insurance premium back into the country for local investments.
“This should tell you that we are there to safeguard your assets and we shall continue doing that in many years to come,” she said.
Muyenga added that ZSIC Group continued to command respect, not only within the country, but also abroad.
She thanked the farming community in Choma for their continued support to the company as evidenced through the increased volume of business.
And ZSIC says it will establish a microfinancing institution that would provide financial assistance to Zambians at affordable borrowing rates.
Muyenga said the new institution would provide microfinance at reasonable interest rates as compared to other institutions that were currently exploiting Zambians.
She said this situation would inevitably force other commercial banks and microfinance institutions to review their interest rates in favour of the Zambian people.
Muyenga said this would be good for the Zambian economic landscape because people would borrow money for investment at reasonable interest rates.
She said ZSIC was better placed to manage microfinance since the company had been funding institutions that are involved in similar business.
“Then we decided that she should short-cut the process and just deal with the public directly by providing finances at reduced rates,” she said. “This will force other banks and lending institutions to reduce their interests.”
Muyenga said ZSIC was also working out products to meet the needs of the growing informal sector.
She said the company intended to establish a personal pension scheme for people who were self-employed for them to save money for their future needs.
Muyenga said the company plans to collaborate with the Zambia National Marketeers Association (ZANAMA), Bus Drivers Association and the Cross Border Traders Association in the implementation of the envisaged scheme.
“We understand that for us to succeed in our business, strategic interaction and engagement with our clientele is of crucial importance as we package our products,” she said.
Muyenga said ZSIC had been restructured to achieve growth and diversification in its streamlined operations which had become more efficient and effective in service delivery.
Labels: AGRICULTURE, INSURANCE, IRENE MUYENGA, ZSIC
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ZSIC, Access Bank agree to help small-scale farmers
Written by George Zulu in Monze
Tuesday, September 01, 2009 4:39:11 PM
ZAMBIA State Insurance Group and Access Bank Africa have agreed to help small-scale farmers in Zambia under the New Munda credit scheme run by the National Association for Peasant and Small Scale Farmers of Zambia. This is an K8 billion credit scheme aimed at improving food production in the country.
ZSIC managing director Irene Muyenga said this in an interview after the launch of the agriculture inputs distribution for 2009/2010 farming season in Monze.
She said the scheme was meant to empower small-scale farmers throughout the country and that her organisation, which would act as collateral, had partnered with Access Bank to finance the credit scheme.
Muyenga said farmers should take this opportunity seriously and ensure that the funds which were in form of all the inputs needed were utilised accordingly in order to improve their livelihood and contribute towards the credit scheme.
“ZISC has entered into this business as collateral while Access Bank is financing the programme but I have to quickly mention that farmers to benefit from this credit scheme should work towards increasing their production in order for them to improve their livelihood and contribute towards the credit scheme,” she said.
Muyenga said her organisation was aware how risky the agriculture sector was but indicated that it was worth investing in the sector.
“We are not only dealing with individual farmers under this credit scheme but we have also involved their leaders and farmers have been trained on how to handle and avoid risks on their farm, we shall also monitor the developments and officer necessary extension expertise for this programme to yield positive results,” said Muyenga.
And during the official launch of agriculture inputs distribution at Zambia College of Agriculture (ZCA) in Monze, agriculture minister Dr Brian Chituwo said it was not possible for government alone to reach the over 1.2 million farmers across the country due to resource constraints.
Dr Chituwo said the government initiated the FSP to improve access of small-scale farmers to inputs on matching grants basis, adding that the private sector was encouraged to actively partner in supplying inputs to farmers.
“As government will not always meet the national requirement hence our resolve to support this initiative. It is therefore encouraging and indeed commendable to see such programmes which are not only farmer-driven but also offer long-term solutions to input distributions,” said Chituwo.
And National Association for Peasant Farmers of Zambia president Rodgers Phiri said the K80 billion empowerment would bring about food security, increased income and improved standard of living among the rural populations.
Phiri said his organisation would soon introduce rural banking as a way of empowering people in rural areas.
Labels: ACCESS BANK, AGRICULTURE, BRIAN CHITUWO, IRENE MUYENGA, MONZE, RODGERS PHIRI, ZAMBIA COLLEGE OF AGRICULTURE, ZSIC
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Financial meltdown hits insurance sector
Written by Mutuna Chanda in Ndola
Sunday, July 05, 2009 4:28:04 PM
ZSIC Group of Companies managing director Irene Muyenga has said the insurance industry is feeling the pains of the global financial meltdown. And commerce minister Felix Mutati said the government would this year implement reforms that would reduce business licences from 517 to 290 under the first phase.
Speaking during a ZSIC cocktail on Friday evening at the ongoing 44th Zambia International Trade Fair (ZITF), Muyenga said firms in the insurance market were finding ways of staying afloat.
“Products in the Life category are becoming increasingly difficult to sell as prospective clients opt to use their income on household goods rather than buy life insurance products,” Muyenga said. “As for general insurance products, we have seen a general decline in the risks being covered as most of the clients opt for the cheapest products or not insure at all in order to reduce costs.”
She said ZSIC Group’s new strategic focus would be targeted at additional investment opportunities in infrastructure with more emphasis on multi-purpose property.
“These will be modeled to include business, leisure, retail and residential space among other ventures,” she said. “In anticipation of this growth, the group has created higher and broader underwriting capacities both internally and externally in conjunction with our reinsurance partners. We also intend to bring the un-insured in the informal sector on board through the provision of micro-insurance. By the term un-insured we refer to the marketeers, bus drivers and conductors, traders, SME’s and many others.”
She said ZSIC planned to set up micro financing and asset and property management companies in the medium term.
“Our ultimate goal is to have the Group listed on the Lusaka Stock Exchange by 2011,” said Muyenga.
And Mutati said the reduction on the number of licences would cut by 30 per cent on the compliance costs which stood at K2 trillion.
He also said that K1.3 trillion could be channelled to job creating investments if ZSIC and the pensions funds worked together to unlock their investments.
Labels: FELIX MUTATI, GREAT DEPRESSION II, INSURANCE, IRENE MUYENGA, ZITF, ZSIC
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ZSIC subsidiaries don’t qualify to be licensed as insurance companies, says Mapipo
Written by Chibaula Silwamba
Friday, January 02, 2009 3:07:57 PM
THE Pensions and Insurance Authority (PIA) has revealed that Zambia State Insurance Corporation (ZSIC) subsidiary companies do not qualify to be licensed as insurance companies because of some irregularities contrary to the law.
And PIA registrar Chris Mapipo has queried ZSIC for abrogating the law by appointing a person who does not meet the requirement of 10 years experience in the insurance industry as its managing director for the ZSIC Life Company.
According to Mapipo's letter dated December 26, 2008 to ZSIC Limited managing director Irene Muyenga and obtained by The Post in Lusaka, PIA issued the licences to ZSIC Life Company and ZSIC General Insurance Company with “great reluctance” but with strict instructions that ZSIC normalises all the issues it was queried on by March 31, 2009 latest.
“Firstly, we wish to advise that the mandate for you to operate as a composite insurance company expired on 23rd December 2008. This entails that you no longer have the capacity to enter into or sustain an insurance contract from that date,” stated Mapipo in a letter copied to Ministry of Finance permanent secretary Dr Wamundila Mbikusita-Lewanika and PIA board chairman Smart Phiri.
“The three year period granted to Zambia State Insurance Corporation Limited to reform itself has certainly been sufficient time for you to have transferred all contractual obligations to the two separate insurance companies that have been formed.”
On share capital, Mapipo stated that all entities licensed by PIA submit copies of their bank statements as proof of capitalisation.
“Kindly ensure that the relevant bank statements are submitted by 31st December 2008,” he stated. “Your company was given a list of our licence requirements. The schedule clearly indicated that the business plan must show three years projections of the balance sheet, profit and loss account and revenue accounts. We are at pains to understand why despite the three year grace period you are unable to submit these details.”
Mapipo stated that ZSIC's submission on the matter was incomplete.
“We wish to advise that this is probably the first time we are having problems accepting a business plan from an existing insurer. Kindly ensure that a proper plan is submitted by 31st January 2009,” Mapipo demanded.
Mapipo also expressed dissatisfaction with the submission on reinsurance.
“Your submission on this point raises great concern. Zambia State Insurance Corporation Ltd ceased to carry out business on 23rd December, 2008.
In the circumstances, the new insurance companies need to arrange their own reinsurance programmes for the risks that they will carry. They cannot rely on the contracts entered into by the holding company for the entire first quarter,” Mapipo stated. “If indeed there is an understanding that the reinsurers of the holding company will provide cover for the newly formed companies, this must be evidenced in writing.
As you are well aware, Section 102 of the insurance Act especially requires insurers to submit reinsurance treaties or reinsurance programmes to the authority. It is of great concern to us that there is no evidence of reinsurance protection for the first quarter of 2009. Given the time that you have had this should have been done in time. Kindly ensure that this is carried out by 31st January 2009.”
And on the appointment of a chief executive officer/managing director of ZSIC Life Company, Mapipo noted that the law was very clear and PIA would not allow any person who does not meet the requirements to take up such a position.
“The provisions of Section 26 (4) (b) are binding and cannot be altered by my office. Kindly ensure that you appoint an individual with the required experience by 31st March, 2009,” stated Mapipo in reiteration to his earlier letter dated November 26, 2008, in which he wrote:
“The proposed chief executive officer does not meet the 10 years experience required under Section 26 of the insurance Act. The Act does not provide for a separate officer. The chief executive officer is the principal officer of the company.”
Mapipo demanded that ZSIC complies with the law.
“It is with great reluctance that we, therefore, grant you the licences for your subsidiary companies. From what is outlined above, your companies do not qualify to be licensed.
However, in the interest of the nation and hoping you will be compliant, the licenses have been issued. Kindly take our observations and deadlines seriously,” Mapipo stated.
“Licence numbers 0049 and 0042 are issued respectively in favour of Zambia State Insurance Corporation General Limited and Zambia State Insurance Corporation Life Limited.”
In his earlier letter dated November 26, 2008, Mapipo stated that his office acknowledged receipt of an application for a long term insurer's licence submitted by ZSIC for its subsidiary company [ZSIC Life Limited] but PIA could not make full analysis of the application because ZSIC did not supply adequate information.
“The application form for a licence needs to be signed by a director of the applicant company. In the application form that has been submitted, this has not been done. No three year business plan has been submitted. There is no evidence provided to show that share capital has been paid for. A list of all assets and liabilities of the company needs to be provided as required by Section 10 of the insurance Act,” Mapipo stated.
“Employees listed as branch managers are the same as those listed under Zambia State Insurance Corporation General Ltd. The employees cannot work for two insurance companies.”
Mapipo further demanded that there was need to clearly outline the services that would be covered by the holding company [ZSIC Ltd] and the terms of engagement.
“I would further suggest that you consider holding on to your plans to launch the company until full compliance is met,” advised Mapipo.
But ZSIC company secretary Anock Mbambala said ZSIC had resolved all the queries that PIA had raised.
“Those were preliminary enquiries that PIA was making during the split period. After that letter [of November 26] we clarified all those [queries]. That is why the licenses were granted. Naturally, during the preliminary process, there is that interchange of ideas. They were enquiring on certain things and after some discussions and write ups all those were clarified. Eventually they issued a licence…I think that was two or three days ago,” Mbambala said.
Asked about the query on the managing director of ZSIC Life Company who does not meet the qualifications, Mbambala responded: “Even that we discussed with PIA and it was resolved. It was one of the issues that they raised.”
Further asked if ZSIC had found another person with 10 years experience required by law or it had maintained the same appointee, Mbambala said that the appointee was suitable.
“He is actually suitable.
There was just some misunderstanding…he has the 10 years experience. This is an individual who was working for…I think Stanbic [Bank] for five years then he worked for African Life Assurance for another five years and then he has worked with us,” said Mbambala.
However, Mbambala's argument contradicts the law because the insurance Act requires that the appointee to the position of managing director/CEO of an insurance company should have 10 years experience in the insurance industry and not any other field.
ZSIC has transformed into a holding company called ZSIC Group of Companies or simply ZSIC Limited, which would manage two subsidiary companies - ZSIC Life Company and ZSIC General Insurance Company.
Labels: CHRIS MAPIPO, INSURANCE, PIA, ZSIC
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Chamber of Mines urges govt leaders to exercise self-control
By Kabanda Chulu
Tuesday September 02, 2008 [04:00]
CHAMBER of Mines president Nathan Chishimba has appealed to government leaders to exercise self-control in order to maintain current economic growth rates. And Zambia State Insurance Corporation (ZSIC) financial and investments director Zingani Phiri said there was no need to disturb the budget cycle because of the state funeral.
During the contribution of K100 million towards the funeral for the late President Levy Mwanawasa at the Bank of Zambia (BoZ) yesterday, Chishimba said the mining sector had continued to grow due to the good policies of the late President.
"When President Mwanawasa was elected in 2001, the mining sector was not performing well but over the years and due to his guidance (President Mwanawasa), the mining sector has continued to grow and just last year, a UK based group of investors voted Zambia as the best mining destination," said
Chishimba. "So we appeal to government leaders to exercise self-control and show good leadership during this solemn moment in order to maintain and sustain the current economic gains."
And presenting a ZSIC cheque worth K20 million, Phiri said the state funeral should not be left to government to handle alone.
"During the reign of the late President, the insurance sector has continued to record positive gains and in appreciation to what late President Mwanawasa did, we are presenting this little token to supplement government efforts because they should not be alone in this funeral," said Phiri.
"We hope this will help in one way or another especially that the funeral was not planned for hence the budget cycle should not be disturbed."
And receiving the donations, BoZ deputy governor Dr Denny Kalyalya said the financial contributions would ease the financial pressures which government is faced with the state funeral.
"We thank the stakeholders for making these contributions and it shows that the late President touched on many lives through his able leadership qualities and we need to remain steadfast to ensure continued growth," said Dr Kalyalya.
Last Friday, Investrust Bank Plc made a contribution of K20 million and so far the Central Bank has remitted K196.5 million towards the funeral.
Labels: CHAMBER OF MINES, NATHAN CHISHIMBA, ZINGANI PHIRI, ZSIC
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State warns loss-making parastatals
By NKWETO MFULA
GOVERNMENT has reiterated that it will not protect loss-making parastatals from business competition. Minister of Commerce, Trade and Industry, Felix Mutati, said in Ndola on Sunday that Government expected parastatals to be competitive so that they could declare dividends. Mr Mutati was speaking during the Zambia State Insurance Corporation (ZSIC) cocktail party to celebrate its 40th anniversary.
“We are not going to protect any loss making company that will want to do business with Government and we do not want them ask Government to shield them,” he said. Mr Mutati called on parastatal companies to be proactive by coming up with business products that would make them profitable. He commended ZISC management for keeping the company focused and for rejuvenating the company’s services.
Mr Mutati said the separation of life and general insurances should result into the corporation becoming a market leader in the insurance industry.
“Only a few years ago, this company was a dying baby but you have managed to turn the corporation into a profit making company,” he said.
And ZISC managing director, Irene Muyenga said the insurance market has become more stable and active as the number of insurance companies was on the increase.
Ms Muyenga said innovations in the insurance industry was evident through new insurance products.
She said the General insurance business and the Life and Pension Products would be introduced as independent entities before the end of this year.
“We are hopeful that by the end of December 2008, the separation process will have been completed,” he said.
Labels: FELIX MUTATI, IRENE MUYENGA, PARASTATALS, ZSIC
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ZSIC introduces investment plan for average Zambians
By Fridah Zinyama
Saturday June 28, 2008 [04:00]
ZAMBIA State Insurance Corporation (ZSIC) has introduced a Classic Investment Plan for the average Zambian who does not have access to other financial markets. The Classic Investment Plan is a five-year endowment policy, where the policyholder will have to pay premiums at monthly, quarterly, half-yearly or yearly installments.
The premiums paid are split into an investment component and a risk (protection) component.
Responding to a press query, ZSIC unit linked funds manager Tontela Siwale said the company had introduced the Classic Investment Plan for the ordinary Zambians due to the growth of the financial markets and heightened investment awareness in the country.
"We have recently seen the oversubscription of LuSE IPOs Lusaka Stock Exchange Initial Price Offers, the launching of a number of unit trusts and even the development of interesting mortgage products," he observed.
"All of these investment opportunities are very attractive and lucrative but seem to only offer their benefits to the more affluent segment of our society."
Siwale said it was on this basis that ZSIC's Life Assurance, which is one of the oldest and most misunderstood investment vehicles, has offered these benefits to a wider segment of the Zambian society.
"Life Assurance has developed into an important investment product which also offers financial protection," he said. "ZSIC has the most developed distribution channels and can thus offer these opportunities to a larger segment of our society."
Siwale explained that Life Assurance contracts were split into two broad categories - those that have only a protection element and those that have a protection and an investment element.
"The Classic Investment Plan offered by ZSIC, thus falls into the second category," explained Siwale. "This product is a unit linked endowment policy, which means that the value of the policy is linked to the performance of units in the ZSIC Life funds."
Labels: ZSIC
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Govt wants more from parastatals
By Joan Chirwa
Thursday December 13, 2007 [03:01]
FINANCE minister Nga’ndu Magande yesterday threatened to withdraw shares from parastatals that have not been paying dividends to the government. And
Indo Zambia Bank (IZB) has this year made a
total dividend payment of K2 billion to the government as a shareholder. Magande said a huge number of parastatal organizations in the country had not been paying their dividends to the government as a shareholder.
“We have not seen fruitions from many of these parastatals in the country and if government cannot get a return as a shareholder, then it is better to withdraw its investment,” said Magande after Indo Zambia Bank paid a final dividend of K800 million to the government as a shareholder.
“Only a few parastatals have been paying dividends and I must say that the Minister of Finance who holds shares on behalf of the people of Zambia will expect returns from these parastatals, but very few are paying dividends.”
Zambia State Insurance Corporation (ZSIC), which is one of the parastatals in the country, says it is not against the idea of paying dividends to the government but it has delayed to do so because of the nature of the insurance business.
“We are in a probability business and everything we do depends on the occurrences unlike other sectors,” said Irene Muyenga, ZSIC’s managing director. “For the period ended March 2007, we have not paid any dividends to the government because we had to settle huge claims for companies such a Konkola Copper Mines (KCM) and BGRIMM Explosives. However, the payment of dividends is on our business plan and we are going to do that.”
Magande said government holds shares in a number of parastatals adding: “This is a big investment worth trillions of kwacha.”
Among the parastatals that government holds shares in include Zesco Limited, National Pension Scheme Authority (NAPSA), Zamtel, Zambia Postal Services Corporation (ZAMPOST), Tazama Pipeline and Zambia National Building Society (ZNBS).
Zesco Limited, Zambia’s power utility company, is yet to give its position on the matter.
According to the Ministry of Finance, some of the institutions that have been consistent in paying dividends include Nanga Farms and Zambia National Commercial Bank.
And during the presentation of the K800 million dividend cheque, Indo Zambia Bank board chairperson Orlene Moyo announced that the bank would soon be commissioning a branch in Chipata and another in Lusaka’s industrial area.
Indo Zambia Bank, which is one of the main parastatals in the country, made an interim dividend of K1.2 billion in March this year. The payment of the K800 million dividend by the bank yesterday translated into a total payment of K2 billion.
“Two more branches are going to be added to the existing nine branches that the bank currently has,” said Moyo.
Labels: DIVIDENDS, MAGANDE, PARASTATALS, ZSIC
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Govt debt sinking ZSIC - PAC
By Mwala Kalaluka
Saturday October 20, 2007 [04:00]
THE Parliamentary Public Accounts Committee (PAC) on Thursday said Zambia State Insurance Corporation (ZSIC)’s competitive age and profitability is nose-diving following failure by the government to clear its debt with the parastatal. And Finance Permanent Secretary Dr Mbikusita Wamundila Lewanika told PAC that the government opted to deal with private insurance companies other than ZSIC in order to comply with tenets of a liberalised economy.
Dr Lewanika was making submissions on the report of the Auditor General on the accounts of ZSIC for the financial year ended March 31, 2003 to 2005.
Following Dr Lewanika’s submission, Mbabala UPND member of parliament Emmanuel Hachipuka charged that the government was the major reason behind ZSIC’s problems.
Hachipuka said there was need for Dr Lewanika to assure PAC that the K25 billion that the government owed ZSIC would be paid back to resuscitate the corporation’s operations.
“If you (government) pay back the money, you will be stocking up money and you will be stopping them from having these overdrafts,” he said. “Forget about the issue of how much you owe Professional Insurance and these others.”
But ZSIC finance director Stanley Phiri explained to PAC that the corporation’s profit margin was indicating a negative slant because of the on-going restructuring process.
He pointed out that following a change in the insurance sector’s legal framework, ZSIC was moving away from offering insurance services in a composite manner.
Phiri said ZSIC was unbundling the composite insurance structure through the formation of two companies that would serve general and life insurance services separately by January 2009.
He also expressed hope that once the board-approved business plan for the corporation had been conclusively dealt with, the profit margin would take a positive slant.
Hachipuka, however, noted that restructuring could never affect the profit regime of an institution.
He also urged ZSIC management to avail PAC with the copies of the business plan, which it intended to use to get back the institution to its feet.
Contributing to the discussion, PAC chairman Charles Milupi said ZSIC could contribute significantly to the country’s coffers, amidst the competition it was getting from emerging insurance companies, if the government debt was liquidated.
Milupi also advised ZSIC to look inwardly and see how it could become a fully commercialised entity.
Responding to some of the concerns, Dr Lewanika said the debt the government owed ZSIC was a historical one but that efforts were being made to pay it off following verification.
PAC members also wondered why the government had stopped doing business with ZSIC.
Siavonga UPND member of parliament Douglas Syakalima raised concerns over why the government opted to deal with other private insurance companies other than its ‘baby’ and Dr Lewanika said this was done to comply with tenets of a liberalised economy.
“If the government only does business with ZSIC, it would kill the spirit of competitiveness,” said Dr Lewanika.
Dr Lewanika said ZSIC’s performance had improved as reflected in the corporation’s turnover in September 2006, which had exceeded the turnover for the whole 2005.
Labels: DOMESTIC DEBT, EMMANUEL HACHIPUKA, PAC, ZSIC
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