End of an era! . . . First generation insurers exit

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Grace Muradzikwa

One of the first companies to indigenise and set up successful regional businesses, Zimre Holdings, has embarked on a reorganisation exercise, which will result in its re-branding of its main unit Baobab Re tonight.

The re-branding also brings an end to an era which was dominated by four insurance personalities.
Zimre Holdings is the country’s largest reinsurance company, which also birthed several insurance entities. However, its sale of a30,03 percent stake in NicozDiamond to NSSA signals a huge shift from the insurance model that Albert Nduna — its CEO from 1984 to 2016 — pursued.

Nduna: The pioneer
Nduna was at the helm of Zimre for 32 years and presided over the unbundling and separate listing of Fidelity Life and Nicoz Diamond on the Zimbabwe Stock Exchange.
The four individuals who presided over this time are Nduna, Solomon Tembo, Grace Muradzikwa and the late Simon Chapereka.

However, with the impending sale of Zimre’s stake in Nicoz Diamond and the loss of control in Fidelity Life, the era of independent Zimbabwe’s pioneers and stalwarts has come to an end amid speculation that Muradzikwa might not stay on as managing director of NicozDiamond.

NicozDiamond will merge with a much smaller company Tristar Insurance, which CEO Doug Hoto labelled a problem child at its analyst briefing on Wednesday, but will become part of FML (see Mamvura’s Market Minute).
And analysts believe that under such an arrangement, Muradzikwa might not stay on as MD for long.

The mother of insurance: Grace Muradzikwa
Muradzikwa joined Zimbabwe Reinsurance Corporation in 1984 and established the personnel department with the responsibility of setting up the human resource and administrative systems and conditions of service for ZimRe.

In 1994, she was promoted to assistant general manager (planning and marketing) focusing on spearheading ZimRe’s external strategic thrust.
Her rise continued as she was appointed general manager of Diamond Insurance Company in 1995 with the responsibility of turning arund the company which ranked 12 out of 13 insurers.

By 1997, she had turned it around to number 3 out of 20 companies. In October 2002, she oversaw the merger of Nicoz and Diamond to form NicozDiamond the largest short-term insurance company in the country. She then became the first black woman to list and head a publicly traded company in the country.

The Stalwarts: Tembo and Chapereka
Tembo took over as the managing director of Fidelity Life Assurance company in the late 90s. Tembo who has a strong technical background, started his career as a trainee engineer with UK-based Massey Ferguson Training Centre before joining the institute of Agriculture. In the year 2002, Zimre Holdings under his leadership pe netrated the South African market as part of an accelerated regional exposition.

In September 2002, Tembo doubled up as managing director of both Zimre Holdings and National Insurance Company of Zimbabwe.
In 2003, Zimre won a contract to run operations of Kenya National Insurance Company under his leadership.

Analysts believe that Zimbabwe’s insurance history would not be complete without the mention of Muradzikwa, Nduna, Tembo and Chapereka. “I believe Muradzikwa alongside the other three male executives including the late Chapereka, played a significant part in shaping and developing the country’s insurance sector.

When Nduna took over Zimre, he managed to turn it into a corporate giant and in turn groomed many executives and improved the sector tremendously,” said market analyst Fiona Chigwida.

Speaking in an interview with Business Weekly, the current Zimre Holdings Limited CEO Stanley Kudenga said acknowledged the role that had been played by past insurance executives saying that

Zimbabwe has one of the most developed insurance industry and financial services sector beyond South Africa.
“This is in terms of product range, skills, both short term and life. We have products that almost match international standards,” he said.

“In terms of skills we have one of the best set and development programmes which was initiated by the likes of (Albert) Nduna.
“I don’t think you can go anywhere in the region and in Europe and not find people that have come through the Zimre institution led by Nduna,” he added.

Going forward Kudenga said chances are very high that the local sector will catch up and match the developed world in terms of penetration. “What is now lacking is growth in penetration and with ICT platforms Zimbabwe has the skills set that will be able to come up with products that can increase market penetration.

“On product development we lead, but we are lacking in terms product penetration especially with the dynamics in the changes in our economy from formal to informal,” said Kudenga.
“The growth has been limited. It was growing fast with a growing middle class but that middle class has almost evaporated so it’s a question of how do we adjust to the new dynamics.”

In a separate interview, Nduna said he is happy the insurance industry is in the hands of disciplined and competent individuals whom he can vouch for any day. He however said what was lacking in the industry is education of the average Zimbabwean on the importance of insurance both from an individual level and from an economic development level.

“People should know insurance just as much as they know accounts or auditing,” said Nduna adding that insurance should be taught as a separate subject from schools up to university level.
“There is need to understand that insurance is important to the development of the economy,” he said, adding that in the 80s insurance companies would be used as a litmus test on the acceptability of Treasury Bills (TBs).

“In the 80s, government would choose one or two insurance companies and offer them Treasury Bills. If one of those could offer to take up at least 20 percent of the issue then they would know it will be successful, but if it takes 5 percent for example, they would know it wouldn’t be a success and will shelve it,” said Nduna.
“So I think the role of insurance in the economy is downplayed. The more we strengthen the insurance sector, the more we will improve the capacity to develop the economy with our own resources,” he said.

Commenting on the state of the sector, Nduna, who said the sector was once in the top five in Africa in the 80s and only collapsed during the hyperinflation period and has not recovered fully since then. “After 2008 it became very difficult to convince people to take up insurance policies. The perception is very bad.”
“People who took up policies during the 70s and 80s lost everything during the hyperinflation era.”

Nduna said much of the value was lost in the equities market after the ZSE “collapsed” towards the end of hyperinflation.
“Property investments were solid, but with tenants struggling to pay rent and asking for downward reviews on rentals, the monetary values of these properties can be challenged. There is no income flow.”

Nduna bemoaned the fact that portfolios could not be diversified with investment outside the country. He however said Zimre used its regional operations to diversify risk. Nduna, however said he was happy players in the sector have self-discipline while the authority is very good and competent.

*This article is a revised version from the one first published on August 18, 2017.

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