NicozDiamond to shore up Uganda operations

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ZIMBABWE Stock Exchange-listed insurance firm NicozDiamond Insurance (NDI) has plans to recapitalise its Uganda operations by year end as the company’s earnings for the half-year to June improved.

Report by Bernard Mpofu

NicozDiamond, which reported a profit after tax of $1 million during the period under review from $654 119 achieved during the same period last year driven by growth in net premium written, said it would maintain its regional presence to grow income.

The company’s net premium rose to $10,7 million from last year’s $8 million.

The group posted an operating profit of $1 180 092 for the period.

Profits from insurance underwriting amounted to $678 182, with the Zimbabwean insurance entity contributing 100% of the underwriting profit, while First Insurance Company (Fico) of Uganda had a slight underwriting profitability.

Underwriting profit, according to chairperson Albert Nduna, grew by 127% from June 2012 and gave rise to the high growth rates in profitability for the period.

Nduna said while net premium written improved, low disposable income had resulted in reduced demand for insurance.

Turning to regional operations, Nduna said the company maintained its 11% investment in Diamond General Insurance of Zambia.

“Fico remains in need of new capital to boost its underwriting capacity and improve its competitiveness in the market. Concerted efforts are being made to ensure that the capital-raising project is concluded before the end of 2013,” Nduna said.

“The company is still on a high growth trajectory and good underwriting profits are being recorded. The company still has a management and technical services contract with United General Insurance of Malawi and the entity remains profitable.

“The start-up insurance company is expected to commence operations beginning in 2014. In Uganda, economic growth is estimated to have been on target at half year and is expected to continue growing, backed by growth in construction, transport, communication and real estate activities.”

NDI, like many local companies that have spread their tentacles in the region, have found the going tough.

However, they remain optimistic that an anticipated growth in Uganda’s economy on the back of oil and gas discoveries could grow the business.

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