FML targets becoming largest short term insurer by market share
Insurance24 Reporter
HARARE, First Mutual Holdings Limited (FML) will become the largest player by market share in the short term insurance industry through merging NicozDiamond and Tristarinsurance, chief executive Doug Hoto has said.
NicozDiamond is currently within the top three short term insurers, where Old Mutual dominates while players such as Alliance Insurance and Zimnat also command reasonable share of the market.
Hoto at the Group’s analyst briefing said at least $6.3 mln fresh capital will be injected into the merged entity to enhance its underwriting capacity and ability to pay claims.
“Nicoz diamond is a huge player in the short term insurance industry and on the current market position, we will be number one,” he said.
He said very experienced in that sector and once it manages to retain all the business, we will put more cash and have the critical mass in the short term.
FML is currently consummating a transaction in which it will acquire NicozDiamond majority stake held by the National Social Security Authority (NSSA). It is after finalisation of the transaction that the operations of NicozDiamond and Tristarinsurance Company who are both short term insurers are merged into a single short term insurance entity. The process is expected to take up to 24 months to complete.
As at 31 July 2017, Nicoz had a market capitalisation of $17.7 mln, price to book value of 0.98x and total assets of $41.2 million as at December 2016.
On other hand, according to Ipec’s Q1 non-life report, in terms of capital position compared to minimum requirements Nicoz was at $13.24 mln, Old Mutual at $21.83 mln and Zimnat at $8.72 mln.
During same period, the volume of business written by the non-life insurance industry in terms of Gross Premium Written (GPW) increased by 2% from $66.59 million for the quarter ended 31 March 2016 to $68.22 million mainly driven by a 14 percent growth in motor insurance business.
All the registered non-life insurance companies reported capital positions which were compliant with the minimum capital requirement of $1.5 million.
