TA Holdings, Zimbabwe’s largest listed investment company, sees its South Africa-held insurance funds multiplying five times to $100 000 in three years, buoyed by the Botswana Insurance Company (BIC) and new foreign operations, which would be added to the portfolio in the near term.
Neural (Pty) Limited’s insurance portfolio is currently estimated at just $20 million, but would be larger than this had its bid to acquire an additional insurance asset last year succeeded.
“I would like to see this growing to minimum of $100 000 in the next three years,” Shingi Mutasa, TA executive chairman, said in an exclusive interview. “The unused potential is big.”
The South Africa-based insurance management firm is wholly-owned by TA Holdings — Zimbabwe’s largest listed investment firm — through Trans Industries (Pvt) Ltd( TI), the group’s investment management company in the country.
TA’s foreign business is confined to insurance and hotel management, but is driven largely by insurance firms based in Botswana, Uganda and Nigeria.
Mutasa sees the insurance portfolio coming second after Sable Chemical Industries this year in terms of contribution to group revenue and profitability.
Last year, the average gross premium written (GPW) by insurance operations outside Zimbabwe increased 14% over 2008 to $7,9 million, led by BIC — the largest short-term insurer in Botswana in which TA holds 62,5%.
The firm accounted for the bulk of the $1,8 million operating profit by TA’s foreign investments. BIC made an underwriting profit of 25,9 million pula or approximately $3,7 million after GPW rose 31% in pula terms from the year before.
Lion Assurance Company Limited is currently under expansion and is poised to lift the value of insurance assets under Neural’s management.
In February, Neural formally acquired a management contract for Cornerstone Insurance plc, a short-term insurance company in Nigeria, and plans to add a few more assets in the near term.
Over the next three years, the investment fund targets establishing its footprint in Mozambique, Angola and East Africa, taking advantage of a gradual growth in middle class and insurance assets.
Africa’s insurance penetration rate is currently seen at 1,4% including South Africa and at just 1% excluding business written in the largest economy on the continent.