ZB suspends plans for offshore insurance unit in anticipation of improved nostro and foreign currency situation.

ZB suspends plans for offshore insurance unit in anticipation of improved nostro and foreign currency situation.

Insurance24 Reporter

HARARE, ZB Financial Holdings says has in the meantime put on hold plans to set up offshore insurance services in order to monitor how the new country administration will address nostro and foreign currency issues.

Chief executive officer Roy Mutandagayi told Insurance24 that the group will consider setting up regional financial services in Mauritius and Botswana if the current dispensation fails to settle foreign currency situation.

“Like everyone else we are hopeful that the new dispensation will bring a turnaround into our insurance business by addressing issues that have been problematic,” he said.

A number of insurance companies last year embarked on migrating some of their insurance services to other countries citing nostro and Forex issues which they said are hindering foreign claim settlements.

ZB Holdings insurance units include ZB Life and ZB Re-insurance. Mutandagayi said  premiums in the past year remained flat due to the economic situation but overall ZB insurance and ZB Re insurance products were doing well.

He said although insurance may be considered a hard sell it was important for insurance companies to consider offering micro insurance products that suit the economy.

The regulator, the Insurance and Pensions Commission (IPEC) recently told Insurance24 that uptake of micro insurance products by the industry is still not at its optimum but expect the development of micro insurance products by the industry to significantly improve as the implementation of the National Financial Inclusion Strategy gathers momentum.

According to the 2014 FinScope Consumer Survey only 30% of the Zimbabwean population was insured showing low uptake of insurance products.

On other hand, ZB had previously sought to spent US10 million on starting the reinsurance business in Mozambique but developments relating to the economy and security threats in that country prompted
ZB to pull out.

Mutandagayi said Mozambique was no longer an option and the group was looking at exhausting its efforts in the country at the moment.

“We have tried in Mozambique member but due to issues we previously alluded it the Mozambique venture is no longer lucrative for us,” he said.

The financial services group was last year removed from the United States of America sanctions after being placed under them in 2008 and was removed from the list by the United States Department of Treasury’s Office of Foreign Assets Control (OFAC) in October.
However, the Bank has since re-established correspondent banking accounts in four currencies, namely the United States dollar, the rand, the euro and the British pound as it seek to improve its nostro
account challenges