FBC Holdings Limited, one of the Zimbabwe Stock Exchange’s five financial services entities, is close to acquiring the entire shareholding of Eagle Insurance to increase its traction in the country’s insurance market.
The diversified financial services group, which only operated in the secondary insurance market through FBC RE, already owns 25% of the short-term insurer rated the country’s 11th in terms of gross premium written (GPW) and market share.
FBC Holdings on Tuesday disclosed it was in talks for an acquisition it “considered strategic to the group”, but declined to say more in a follow-up enquiry, as the deal is still going through the mill.
The group’s portfolio currently comprises four financial operations, FBC Bank, FBC Building Society, FBC RE and FBC Securities, most of which are recent acquisitions.
Bulking up to 100% in Eagle Insurance will integrate FBC Holdings to the country’s primary insurance market and build an internal synergy with potential to change its corporate profile as well as position it to capture the “rich pickings” expected from the recovery in insurable risk.
Over the long haul, FBC Holdings’ missing tooth would probably be an asset management company.
Eagle Insurance survived two rounds of clean-ups that hit and downsized the insurance, pensions and providence industry early this year, as the Insurance and Pensions Commission skimmed through the milk to eliminate undercapitalised and technically insolvent operators.
Last year, Eagle Insurance reported GPW of $2 million and retained roughly 53,87% of the premium income on its balance sheet, about 3% of the $68,6 million total premium written by the entire industry.
However, its contribution to the net premium written by the industry was higher at 4%, implying a stronger underwriting capacity relative to competitors ranked better.