Afre Corporation Limited, Zimbabwe’s second largest life assurer, has expanded its short-term reinsurance footprint to Botswana with a focus to capture international business on the strength of Botswana’s country reputation.
Despite consistent regulatory reforms and a strengthening operating environment, Zimbabwe’s insurers are still cordoned off from the international risk-management market owing to an enduring country risk and poor rating, aggravated by sanctions.
Group finance director Kennedy Lemani said Afre acquired a licence for FMRE Property & Casualty in January and opened its doors to the market in June, targeting reinsurance business in Botswana and cross-border risk transfers by insurers in Namibia, South Africa and Swaziland.
Lemani said the new operation was still trying the terrain and would not be expected to contribute more than 2% to the group this year.
“We should see the benefits of the reinsurance investment coming through in the next two years,” Sibusisiwe Ndhlovu, Afre’s group chief operations officer, said.
“It’s a long-term investment. At the moment our focus is to develop the right products and to establish the right links.”
She said the Botswana short-term industry was still locked up in annual premiums, a practice which would take long to untangle.
But the market in Namibia, South Africa and Swaziland was more dynamic.
Afre also plans to expand to Zambia as part of its strategy to diversify markets and reduce its exposure to the depressed domestic market, with a long-term view.