A REGIONAL organisation charged with promoting trade, development and integration within the Common Market for Eastern and Southern Africa (Comesa), ZEP-RE (PTA Reinsurance Company), will have an improved capital base and ability to service the region’s industry after a German institution says it may soon be investing an 11% stake in the company worth $15 million.
BUSINESS REPORTER
The German development financial institution, Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG), is the second international development finance institution to join ZEP-RE after the African Development Bank (AfDB), which joined the company in 2011 and currently holds a 13% stake.
ZEP-RE is the manager of a scheme termed the Comesa Yellow Card, a motor vehicle insurance scheme which is valid in all the participating countries.
It covers third-party liabilities as well as medical expenses for the driver of the vehicle and his passengers should they suffer any bodily injury as a result of an accident to an insured vehicle.
Comesa Yellow Card also facilitates cross-border movement of vehicles between Comesa member countries meaning transporters and motorists do not have to buy insurance cover at each border post they cross.
As this card is valid in many parts of the region, transporters and motorists do not have to buy insurance cover at each border post they cross.
If for example, a Kenyan motorist wishes to drive to Harare, Zimbabwe, he will purchase a Yellow Card from an insurance company in Kenya for the required period of time to cover the countries he will travel through.
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Should he be involved in an accident in Malawi enroute to Zimbabwe, he will be required to report to the Malawian Yellow Card National Bureau, which is the focal point representing all the insurance companies issuing Yellow Cards, and the traffic police.
The National Bureau will then handle and settle the claim arising from this accident. Therefore, if his vehicle is in a roadworthy state the motorist is then free to continue with his journey to Zimbabwe.
The scheme is currently operational in Burundi, Zimbabwe, Democratic Republic of Congo, Eritrea, Malawi, Ethiopia, Kenya, Rwanda, Uganda, Tanzania, and Zambia with about 150 insurance companies involved in the operation of the scheme.
ZEP-RE was created by an Agreement of Heads of State and Government of the Comesa region on November 21 1990 in Mbabane, Swaziland.
An extraordinary general assembly held on 28th March 2014 in Nairobi approved the admission of DEG into the shareholding fold.
Zep-Re is rated B+ for financial strength and triple B for issuer credit rating by A.M. Best Europe, as per the ratings released in December last year.
“The outlook for both ratings remains stable. The ratings reflect its strong risk-adjusted capitalisation, solid and consistent operating performance and established competitive position within its regional reinsurance market,” A.M Best said.
Zep-Re also manages the Comesa Customs Bond Guarantee (RCTG) Scheme, a customs transit regime designed to facilitate the movement of goods under Customs seals in the Comesa region and to provide the required customs security and guarantee to the transit countries.
DEG invests in private-sector in developing and transition countries for purpose of contributing to sustainable growth and improved living conditions of the local population.
