Zim, Mozambique Account for 40% of ZHL Group's Tot...

Zim, Mozambique Account for 40% of ZHL Group's Total Insurance Contract Revenue

Audrey Galawu

Assistant Editor

Despite facing significant global and regional economic challenges, Zimbabwe and Mozambique have emerged as key contributors to Zimre Holdings Limited Group’s robust business performance in the first half of 2024.

These two markets were instrumental in driving the company’s insurance and reinsurance revenues, helping the group achieve impressive financial growth during a period marked by geopolitical tensions, climate variability, and economic uncertainty across Southern Africa.

Zimbabwe contributed 26% to the group’s total insurance contract revenue, remaining a cornerstone of ZHL's business operations.

“Despite the economic challenges stemming from the ongoing currency instability, inflationary pressures, and power shortages due to low water levels, the introduction of the Zimbabwe Gold currency helped stabilize the exchange rate and dissipate the macroeconomic volatility that characterised the first quarter of 2024.

“While the broader economy continues to face pressures, especially from the informal sector's predominant use of US dollars and challenges in the formal retail sector with mobilising hard currency for imports, ZHL’s reinsurance business in Zimbabwe showed strong resilience.

“This steady performance was driven by the country’s demand for life and pension insurance services, which continued to perform well. ZHL’s regional expansion strategy also saw significant success, with Zimbabwe playing a pivotal role in the group's overall insurance contract revenue, accounting for 75% of total revenue from reinsurance operations,” said ZHL chairman, Desmond Matete.

Mozambique, contributing 14% to the group’s total revenue, has proven to be a stable and reliable market for ZHL. The country’s economic growth, recorded at 3.2% in the first quarter of 2024, and its relatively low inflation rate of 3%, made it a key player in the group’s regional expansion.

The growing demand for insurance services in Mozambique, particularly in the life and pension segments, has helped the group tap into new markets, further strengthening its presence in Southern Africa.

The stability of Mozambique’s economy, in contrast to the more volatile markets in the region, has allowed ZHL to achieve sustainable growth. The country’s contribution to the group’s insurance contract revenue underscores the importance of Mozambique as a strategic market in ZHL’s regional portfolio.

As ZHL continues to focus on expanding its reinsurance operations within the SADC region, Mozambique remains at the forefront of this strategy, contributing to the group's profitability and overall revenue growth.

Driven by the strong performance in Zimbabwe and Mozambique, ZHL’s insurance contract revenue surged by 63%, rising from US$19.3 million in June 2023 to US$31.6 million in June 2024. The reinsurance business accounted for the lion's share of this revenue, with 75% of the total driven by regional operations. Life and Pension services also performed well, contributing 22% to total revenue, while the short-term business unit showed signs of recovery with a 3% contribution.

Overall, the group achieved a 16% increase in total income, reaching US$15.0 million, primarily driven by impressive growth in insurance contract revenue and substantial fair value gains from investment properties and equities. ZHL’s profit for the period surged to US$6.8 million, representing a 52% growth from US$4.5 million in 2023.

This strong performance was underscored by effective cost containment measures and profitability across all subsidiary operations.

Strategic Growth and Sustainability Initiatives

Looking ahead, ZHL remains focused on its long-term growth strategy, with Zimbabwe and Mozambique continuing to be key markets for expansion. The group’s regional reinsurance operations, which contributed 49% to total revenue, are expected to play a crucial role in driving future growth as the company looks to expand into Northern Africa. ZHL plans to leverage policy frameworks like the African Continental Free Trade to further expand its market footprint, while also restructuring the balance sheets of its regional operations to enhance underwriting capacity.

In addition to its business growth strategy, ZHL is committed to sustainability through its Eagle Real Estate Investments Trust. The group’s new infrastructure development projects, such as the Mazowe Mall, feature eco-friendly architectural elements designed to minimize the environmental impact. This focus on sustainability is part of the group’s broader Environmental, Social, and Governance principles, which aim to enhance shareholder value while addressing pressing social and environmental issues in the communities where ZHL operates.