Altfin Insurance Company Limited is eyeing a piece of southern Africa’s insurance market and plans to establish its footprint in three countries around the region in the fourth quarter of the year, the firm’s managing director said.
Gift Noko said the insurance arm of Interfin Holdings Limited wants to internally fund its growth into Botswana, the Democratic Republic of Congo and Zambia, to diversify away from the depressed domestic markets.
“We will be spreading wings into Zambia, Congo and Botswana by the fourth quarter of the year and the expansion projects will continue into 2011,” Noko said.
He said Altfin would leapfrog into the new territories through management contracts and joint ventures under which they would offer 50% capital to potential partners.
Since the economy dollarised last year, the quantum of insurable risk has declined steeply due to viability-related rationalisations, forcing the industry to scramble for the little business being created.
The resultant cut-throat competition has seen premium density plummeting and pushing firms into an outward-looking strategy and intensifying market explorations outside the country.
The insurance penetration rate is currently estimated at 1,4% in Africa. South Africa excluded, the rate is only about 1%.
Incorpotrated in 2003 through the merging of Orion Insurance Company and Strategis Insurance Company, Altfin has grown into one of Zimbabwe’s top 10 insurers in terms of writing premiums for various classes of risk such as motor insurance, engineering, personal accidents, marine insurance and corporate fire.
The company is currently negotiating an agreement with Interfin Merchant Bank to launch bancassurance services.
“Altfin Insurance Company Limited and Interfin Merchant Bank have both sent their papers for the deal to the lawyers. Thereafter they will do the signing of the agreement for bancassurance,” said Noko.
Bancassurance is the selling of insurance and banking products through bank branches. An insurance company sets up its products in a bank through which it sells its policies to economic agents.
Under the deal, Interfin Merchant Bank would handle the administrative side of the deal while the insurance company would be responsible for the technical side.