Zim insurance firms seek to preserve shareholder value

CREATING and preserving shareholder value is at the heart of Zimbabwe insurance firms this year asthe economy remains turbulent exacerbated by geopolitical conflicts, which are likely to affect world economies, the Zimbabwe Independent reports.

CREATING and preserving shareholder value is at the heart of Zimbabwe insurance firms this year asthe  economy  remains  turbulent exacerbated by geopolitical  conflicts,  which are  likely  to affect   world economies, the Zimbabwe Independent reports.

In 2023, the firms  had to endure a macroeconomic environment  that was highly volatile particularly in the first half of the year as the local currency rapidly depreciated and prices of goods and services skyrocketed.

The preference and use of foreign currency further grew as businesses sought refuge in the stability of the United States dollar. However, the economy witnessed a relatively stable second half following fiscal and monetary policy interventions that slowed down the deprecation of the Zimbabwe dollar.

In a statement accompanying results for financial year 2023, Zimre Holdings Limited (ZHL) said despite the formidable headwinds, the group remained optimistic to soar in 2024.

The group said its strategy remained anchored on delivering a strong cash wallet by driving a cost-effective insurance float through momentum and scale. It will also increase the contribution from its regional investments among other initiatives.

This will be done by upskilling balance sheet and effective deployment of competitive capital across all strategic business units.

“ …. tilting our property portfolio towards high yielding commercial and retail sectors through near liquid investment structures," the statement reads in part.

"The group’s Eagle Real Estate Investment Trust (REIT) attained Prescribed Asset Status from the Insurance and Pensions Commission of Zimbabwe post the reporting period.

"It is anticipated that the Eagle REIT will bring much-needed liquidity to the real estate market, especially for Zimbabwe’s pension’s community. As a conscious member of society, ZHL is determined to bring high impact sustainable investment opportunities to the public."

ZHL said it would continue to consolidate on its experience and dynamism to enhance market share acquisition through innovations and new tools that embrace customer centric ecosystems,  which will create new value and change for its stakeholders.

This, ZHL said, would be buttressed by significant investment in technology platforms that enhance customer interface with its business and enduring experience engendering long-term customer loyalty.

Another insurance firm, Fidelity Life said given the geopolitical landscape, it remained on high alert and would continue to monitor and carefully adapt to these changing circumstances to deliver value to its key stakeholders.

Fidelity said innovation would also be key in driving products that create and preserve shareholder and policyholder value.

“The central government remains committed to the attainment of the vision 2030 goals under NDS1 (National Development Strategy 1) and NDS2 through various projects, which include among others infrastructure projects in road and dam construction and rehabilitation, as well as irrigation projects," it said.

"This is commendable given aggregate demand created in the value chain and beneficiation in the steel and chrome mining sector.

“Given the above, the business remains on high alert to these activities and will continue to monitor and carefully adapt to these changing circumstances to deliver value to its key stakeholders.

"The business will be preserving its cash wallet through responsible spending and targeted investment into products that survive the test of time. Innovation will be key in also driving the products that create and preserve shareholder and policyholder value," Fidelity further stated.

The firm noted that the global space was likely to remain characterised by the two major ongoing conflicts, the Russia-Ukraine and Israel-Palestine wars.

These current epicentres of geopolitical tensions have the potential to cause far reaching adverse effects in terms of food shortages, supply chain disruptions and rise in global petroleum products, which in turn can cause an increase in production costs and cause volatility in international markets globally.

Locally, the Zimbabwean economy continues to grapple with a depreciating local currency.

It is expected that the multi-currency regime will be maintained, though the majority of transactions in the private sector are currently taking place in the greenback.

The local currency may continue to be the dominant mode of payment in government transactions.

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