Zimre CEO Mulls Diversification

ZIMRE Holdings Limited's new chief executive officer (CEO), Stanley Kudenga, says the group, with interest in the insurance and property sectors, is mulling transformation into a diversified financial services outfit.

Kudenga replaced former CEO, Albert Nduna, who stepped down in November last year after leading the insurance outfit for 20 years.

In his maiden address to shareholders during the Zimbabwe Stock Exchange-listed insurance group's annual general meeting (AGM) in Harare last week, Kudenga said Zimre would leverage on its US$143 million strong balance sheet to venture into other financial services sectors.

"Going forward, we want to grow into a diversified financial services group leveraging on our strong balance sheet," he told shareholders.

Zimre CEO Mulls Diversification

"We have begun to see improved support from the market. We have a detailed action plan... We are focusing on writing profitable business. We have learnt to say no to bad business," Kudenga said.

He spoke as BDO Kudenga, Zimre Holdings' auditors, stepped down citing conflict of interest following his appointment to the firm.

The chartered accounting firm is operated by his brother, Ngoni Kudenga.

Lately, insurance firms have been investing in sectors including asset management.

Writing in the group's annual report, he said the new Zimre executive would pursue high growth opportunities, which could be difficult to identify in cash strapped Zimbabwe, where firms are collapsing and workers are losing jobs.

"It (Zimre) will also diversify its income streams through exploring and pursuing profitable business opportunities that might arise in high growth sectors of the economy," he said.

"The group will continue to enhance operational efficiencies in all its operations in order to align costs to revenues," said Kudenga.

In a trading update, the Zimre boss said the group reported a 46 percent growth in operating profit to US$2,2 million during the first quarter to March 2016, driven by a surge in its reinsurance business and lower business costs.

Gross profit grew 89 percent to US$2,1 million over the same period. He said the reinsurance business contributed US$1,1 million to this figure, after reporting a US$200 000 loss during the same period in 2015.

"Baobab Reinsurance has undergone a turnaround and contributed 52 percent of the profit that is indicated in US$2,1 million," said Kudenga.

The majority of Zimre's business units traded positively during the first quarter.

Kudenga said the group's reinsurance unit had its credit rating reviewed upwards to BBB from BB during the quarter.

"We are seeing an increase in business support from the market in tandem with the improved credit rating and increase in business confidence," he said.