CBZ Holdings eyes regional equity expansion for insurance units

CBZ Holdings in regional equity expansion for insurance units

Insurance24 Reporter

HARARE, CBZ Holdings says is at various stages of engagements towards entering regional equity arrangements for its insurance units under its phased expansion strategy.

CBZ Holdings insurance units are CBZ Life and CBZ Insurance and were profitable during the first half year period ended 30 June 2017 and at the same time are adequately capitalized.

In an interview with Insurance24, Group chief executive officer Never Nyemudzo said the regional expansion is the second phase of the insurance units’ expansion exercise as the group seek increased contribution from the business cluster.

“The first phase has been focusing on Zimbabweans in diaspora who have assets and interests back home that they would want covered.  Next stage is going into equity arrangements, which we said under our regional expansion strategy we are looking at various jurisdictions, and the negotiations and discussions are at different stages,” he said.

Nyemudzo said the Group is targeting at least 20% contribution of the insurance business to both total assets and profits from the current 5% and 15% respectively.

“If you look at key ratios of half year financials, the insurance operations have higher return on asset and higher on equity,” he said.

During the half year period, CBZ Life core capital was $15.50 mln up from $13.50 mln same period last year while the capital cover was 7.8 times compared to 7.5 times in December 2016.

CBZ Insurance was capitalised at $5.9 mln which is above the regulatory minimum with capital cover of 3.9 times. During the period under review, both entities credit ratings were BBB+.

Additionally, CBZ Life profit at $1.5 mln was flat on prior year level despite a marginal decline in total income at $3 mln compared to $3.2 mln in 2016.

Operating costs also declined to $1.5 mln from $1.7 mln in 2016 same period. However, total assets grew to $19.6mln from $19.3 mln in December 2016.

On other hand, CBZ Insurance profit for the period increased to $1 mln compared to $700 000 same period previous year, while total income surged to $2.2 mln from $1.8 mln during the first half of 2016.

Total assets also increased to $16.6 mln from $12.5 mln by December 2016.