FIRST Mutual Life Assurance Company (FML) will engage the informal sector to sell its products as the company expands its footprints across the country.
The move comes after realisation that the company won’t be able to have branches in every corner of the country.
FML managing director Ruth Ncube said the company may provide financial assistance to set up the franchise business while the franchise holder is expected to exclusively sell and distribute FML’s products using its own agency force.
Franchising is the practice of leasing for a prescribed period of time the right to use a firm’s successful business model and brand.
“We have made available a sizeable amount for this channel from internal resources which we cannot disclose now since we have entered a closed period. However, let me mention that this model is far way cheaper yet more effective than trying to establish own offices around the country,” Ncube said.
“Overall, the franchise channel is expected to contribute significantly to the company’s new premium income for individual life business in the medium to long term while at the same time reducing acquisition costs significantly.”
She said the company is targeting the formal and informal sector, but will focus more on small and medium enterprises and the agriculture sector in line with the government’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio Economic Transformation (Zim Asset).
Zim Asset promises to foster strategic linkages and formalisation among SMEs and cooperatives across all sectors of the economy.
Ncube said the products would be accessible through the franchise network and the network would be linked to FML’s computer systems making all transactions made through this channel.
She said the franchise will provide a one-stop shop for customers be it on the medical front, funeral business, pensions and short term insurance.
FML seeks to expand its distribution channel to reach out to all parts of the country at a time when the government is promoting the informal sector.
The franchise initiative would help the informal sector which contributes close to 70% of the business transactions.