Zimre quarterly revenue surges 8pc to US$43,5m

Francis Gakanje

Zimbabwe Stock Exchange (ZSE) listed insurer, Zimre Holdings, says insurance contract revenue grew by 8 percent to US$43,5 million in the third quarter to September 30, 2024.

Company secretary Ms Ruvimbo Chidora attributed the growth to a rise in new business opportunities, growth of both local and external markets, and the diversification of products.

According to Zimre Holdings, the reinsurance sector remains the primary contributor, accounting for 71 percent of the total, down from 74 percent in 2023.

In second place was the life and pensions, which increased its share of contribution to 25 percent from 23 percent in the previous year, followed by the short-term insurance sector, which contributed 4 percent from 3 percent in 2023.

For the period under review, total income rose by 7 percent to US$22,6 million from US$21,1 million in the same prior year period.

This increase was driven by growth in insurance contract revenue, an uptick in non-insurance income, and favourable investment returns, primarily from fair value gains on investment properties resulting from strategic acquisitions made throughout the year.

“All the group businesses contributed positively to total income growth except for the insurance broking business and the reinsurance business operations in Malawi which was impacted by the depreciation of the Malawian Kwacha,” she said.

The group reported a 56 percent increase in profit for the period, rising to US$9,8 million from US$6,3 million in the same prior year period.

“Profit was driven by growth in the top line and investment income compared to the same period prior year with all key business units achieving profitability,” she said.

Total assets reached US$193,2 million, representing a 14 percent increase from US$169,3 million.
Ms Chidora highlighted that this growth was driven by an uptick in both investment properties and financial assets.

Net cash generated from operations at the end of the period amounted to US$16,3 million, up from US$5,9 million, reflecting a remarkable growth of 177 percent.

This increase aligns with the group’s commitment to building a robust cash position.

For the group operations, the contract revenue for the reinsurance and reassurance insurance cluster increased by 5 percent, reaching US$31 million from US$29,4 million during the same period last year.
“The growth was on the back of increased new business acquisitions and business expansion from both local and external markets,” the secretary said.

Ms Chidora added that the cluster is actively advancing its efforts in Africa, aiming to expand its presence across the continent to further enhance its insurance revenue streams.

The Short-term Insurance cluster recorded a 41 percent growth in insurance contract revenue, increasing to US$1,8 million from US$1,3 million in the same period last year.

This significant rise was driven by a strategic focus on core direct business, which improved underwriting capacity, particularly in bonds and guarantees, now comprising 54 percent of the total underwritten business, a substantial increase from 7 percent in 2023.

For the period under review, the property cluster generated total income of US$1,9 million, reflecting a 16 percent increase from US$1,6 million in the prior year.

According to Ms Chidora, “This robust growth underscores the cluster’s resilience and appeal as a value-preserving asset class.”

During the period, the portfolio achieved a collection rate of 94 percent, with occupancy levels averaging 86 percent despite the weakened demand for office space in the central business district.

The insurance broking business experienced a 3 percent decline in net brokerage income, decreasing to US$820 000 from US$842,000, largely due to slower account renewal rates.

However, Zimre Holdings said the business was well-positioned for growth through strategic partnerships aimed at diversifying its revenue streams.

The life and pensions cluster achieved a 5 percent increase in insurance contract revenue, climbing from US$10,3 million to US$10,8 million.

Zimre said its leading market position was maintained through the introduction of innovative products, effective digital and traditional distribution channels, and a customer-centric strategy that successfully captured new business, as demonstrated by a 69 percent growth in retail business compared to 40 percent in 2023.

The wealth management cluster’s total income soared by 141 percent to US$3,1 million, up from US$1,3 million in the same period the prior year.

“This exceptional growth was driven by the business units’ strategic focus on developing new business lines while taking advantage of the regional footprint to diversify its client base,” Ms Chidora added.

Looking ahead, Zimre Holdings said it was committed to maintaining growth by strengthening its diversification strategy, particularly in regional markets.

Key economic indicators point to opportunities in sectors such as insurance, real estate, and wealth management, where the group is well-equipped to take advantage of the rising demand for risk mitigation and inflation-resistant assets.

The group’s commitment to infrastructure development is evident in the Eagle REIT (Real Investment Trust), where its two flagship projects have made substantial progress.

The Mazowe Walk is now 51 percent complete, while the first phase of the Victoria Falls mixed-use development is poised to launch soon, bringing forth new and innovative commercial and residential rental spaces.

“Additionally, the Selbourne Park residential development in Bulawayo commenced during the third quarter aiming to address the city’s growing demand of quality housing and living standards,” Ms Chidora said.

She said that the group’s strategic alignment with emerging trends in digital transformation, regulatory compliance, and sustainable investing will persist in shaping its operations and bolstering resilience amid a challenging economic environment.