ZIMRE HOLDINGS awarded: A PEEP into ZHL’s operations
HARARE, On 21 November 2019, ZimRe Holdings Limited (“ZHL”) was selected by the Institute of Chartered Secretaries and Administrators (“ICSAZ”) as the First Runner Up in the Insurance Category, in the 2019 Excellence in Corporate Governance Awards. The Awards were instituted by ICSAZ with the main intention and objective of promoting good corporate governance practices in Zimbabwe. The Awards also recognize efforts by corporate boards in effectively leading their organizations in a sustainable, innovative and ethical way. They also represent the best practices for benchmarking excellence in corporate governance in the Country.
The Group’s aspiration is encapsulated in its vision which speaks to becoming a highly diversified investment Group. The Group has core competencies in insurance and property businesses. It has operations and investments in Zimbabwe and in 4 countries in the Southern African Region. It is an agile and growth-oriented investor that provides strategic leadership and guidance to investee companies through its corporate parenting policy and ensures value creation and portfolio optimization. It has established a positive reputation of making high impact investments especially in the property sector. It also enjoys significant first mover advantages especially in the regional insurance markets where it has established a presence as the first resident reinsurance operator in those markets. This has given the Group competitive advantage. Central to its tried and tested business model, is the observance of the tenets of good corporate governance. Effective corporate governance structures are in place in all its operations to ensure transparency, accountability and integrity in the conduct of business. All boards of the Group comprise of a majority non-executive director. All boards discharge their duties through properly constituted board committees such as the Audit and Risk Management Committees, Finance and Investments Committees, and Human Resources and Nominations Committees. It also has a sound track record of superior financial performance which has translated to excellent returns to the shareholders.
Group Structure
Company Overview
ZimRe Holdings Limited, formerly known as the Zimbabwe Reinsurance Corporation, was established in 1983 as a public corporation through an Act of Parliament. It started transacting reinsurance business in 1984 with seed capital of Z$2 500 000. As the first locally based reinsurer, the Company was founded on a solid foundation as it had the support of the Zimbabwean insurance industry. The establishment of the Zimbabwe Reinsurance Corporation not only created local reinsurance capacity and curbed the outflow of foreign currency to the external reinsurers, but also resulted in the generation of foreign currency for the Country, then.
The Corporation pursued a growth strategy driven by vertical integration and expansion of insurance and support operations resulting in the creation of a huge and balanced portfolio of insurance and related businesses that were synergistically linked. The Corporation was also responsible for the development of insurance in Zimbabwe and the African region. ZimRe was responsible for training insurance practitioners some of whom are being gainfully employed even in the advanced economies of the world today.
As part of IMF and World Bank inspired economic structural adjustment programmes and reforms of the 1990’s, which called for among other things, the privatization of State-Owned enterprises, ZimRe was selected as candidate for privatization. The privatization process started in 1998 and culminated in 1999 in the listing of the Company on the Zimbabwe Stock Exchange thereby widening the shareholder base to include institutional investors and individuals. Following the demerger of the insurance operations from Head Office in January 2003, ZimRe Holdings Limited became a fully-fledged investment holding company with number of synergistically linked operating subsidiary companies operating in Zimbabwe and the African Region. As previously highlighted, ZHL continued to pursue a growth strategy driven by vertical integration of operations and regional expansion. A vertically integrated insurance Group with investments in Reinsurance, Reassurance, Short-term Insurance, Life and pensions, Reinsurance Broking, Retail Insurance Broking, Property Investments and Agro-industrial operations was created.
Current Group Operations
Emeritus Reinsurance is the flagship of the Group’s Reinsurance operations. The Company which has a presence in Mozambique, Malawi, Zambia, Botswana and Zimbabwe, transacts reinsurance business on a treaty and facultative basis in over 38 countries in Africa. The ZHL Group is currently seized with the recapitalization of the regional reinsurance operations in order to enable them to consolidate their market positions and improve their underwriting capacity and credit ratings.
Credit Insurance Zimbabwe (“Credsure”) is the short-term insurance subsidiary of the Group. It transacts all classes of short-term business, but it has established a niche in offering specialized products such as bonds and guarantees to the market. United General Insurance Company (UGI) of Malawi, which is currently the second largest short-term insurance company in Malawi, is also a key investment of the Group.
Fidelity Life Assurance of Zimbabwe Limited, which is listed on the Zimbabwe Stock Exchange, is a key associate of ZHL The Company offers an assortment of wealth management products to the market.
ZimRe Property Investments Limited (ZPI), which is listed on the Zimbabwe Stock Exchange, manages and develops the Group’s property investments which provide a sound hedge against inflation.
CFI is a key associate of the ZHL Group. The Group is also a significant shareholder in ZUPCO.
The Group’s Business Success Drivers
The Group’s success in the market and business performance is driven by a number of factors among them the observance of sound corporate governance principles. The Group is driven by sound strategy which is reviewed constantly to assess its relevance and effectiveness, and taking appropriate corrective adjustments to produce the desired results. It is also driven by strong and visionary leadership both at Board and management levels.
The Group has a solid balance sheet and always ensures that operating subsidiaries are adequately capitalized in line with regulatory requirements and market competitive requirements. The performance of the Group is enhanced by exploitation of synergies, building and maintenance of strong brands, and maintenance of a sound skills base. Regional diversification provides a sound hedge for the Group especially in view of the elevated country risk in Zimbabwe.
Employees are the major value drivers since our service businesses depend on people and relationships. The Group constantly upgrades skills levels through the implementation of well-structured training and development programmes thereby ensuring that our businesses continue to grow and add value to the stakeholders. ZimRe is also actively involved in the training of insurance practitioners in the local and regional markets as part of its corporate social responsibility programme.
The Group has robust Information and Communication Technology (ICT) systems which are a prerequisite for business success in the financial services sector. Significant investments have been made in upgrading thereby adding impetus to the efficient and effective delivery of services and driving business value. The Group also boasts of efficient and effective business processes which are difficult to replicate elsewhere. Operating subsidiaries are subjected to rating by international rating agencies.
The ZimRe brand is strong both locally and regionally. The Group is also attractive to international investors and is being sought after for business partnership in Africa.
Group operating subsidiaries are active member of regional and international insurance organizations such as the Federation of Afro-Asian Insurers and Reinsurers (FAIR). Membership of these organizations has placed them on the world map and provided them with a platform for networking with business leaders from other nations.
The ZimRe Group is a research-oriented organization which is at the forefront of innovation especially in insurance product development.
The Group builds and maintains positive stakeholder relations through effective communication, implementation of sound market visibility initiatives, and undertaking corporate social responsibility projects. The Group is in constant communication with the various stakeholder groups through its websites, half yearly media and analyst briefings, cautionary statements, advertisements and other channels. Apart from undertaking projects for profit, ZimRe also undertakes projects with a social dimension. These include property development. In the past, the Group has developed residential stands at ZimRe Park in Ruwa for the benefit of hundreds of home seekers. The Group makes various donations to educational and charitable institutions.
Investment Management
The success of the Group is also driven by the adoption of an aggressive approach to the management of investments accompanied by high levels of prudence in executing the investment activities. This has resulted in the growth of the portfolio and widening of the Group’s income base.
Group Culture
A common culture has been inculcated in the staff across the board. The common values and beliefs that are observed in the Group include conducting business in a professional, ethical and honest manner, empowerment of staff and meeting the needs and expectations of customers. The observance of a common culture has contributed to the commendable growth and success of the businesses.
What the Award Means to ZimRe
The selection of ZHL in the ICSAZ 2019 Excellence in Corporate Governance Awards is a significant milestone for ZHL as it affirms our efforts in putting and operating appropriate structures which bring about the necessary checks and balances necessary to protect the interests of all stakeholders thereby enhancing stakeholder confidence in the Group. It is a statement of confidence in our Board and management for the visionary leadership and the strategic direction that the Group is following.
Conclusion
Notwithstanding the challenges in the business environment, the Group will continue to show resilience and deliver value to its stakeholders.
