By Melody Chikono DIVERSIFIED financial services group, Zimre Holdings Limited says climate change has resulted in the reinsurance cluster registering a 48% surge in claims emanating from agriculture in the five months ending May 31, 2022.
The agriculture sector claims emanating from climate change shot up by 91% compared to 43% during the same period in 2021.
Claims from regional reinsurance operations increased to 36% compared to 19% in the prior year mainly driven by floods in Malawi.
Zimre chief executive Stanley Kudenga told shareholders at the company’s annual general meeting on Friday that the high claims experienced in the first five months of 2022 reminded the group that it was in the business of paying claims.
“The local reinsurance cluster was adversely affected by agriculture claims emanating from climate change which have been on the rise. Claims experience rose to 91% compared to 43% during the same period in 2021 while that of the regional reinsurance operations increased by 36% compared to 19% in the prior year mainly driven by floods in Malawi,” he said.
“The claims experience in the first 5 months of 2022 has reminded us that we are in the business of paying claims. Our role in providing risk management solutions for sustainable economic development has been reaffirmed. The group has a rich history of contributing to the development of the Zimbabwean economy.”
Kudenga said despite the headwinds, all the units remained profitable as the group continued to focus on wallet power.
Domestic operations made a 69% contribution to total revenue against a 2021 contribution of 73%, while life and pensions and reinsurance operations led contribution to domestic operations at 46% and 39%, respectively. Regional operations contributed 31% to total revenue with Emeritus Re Malawi and Mozambique posting significant contributions to regional performance at 36% and 28%, respectively.
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Rental income recorded a 131% increase, with Zimre Property Investments maintaining regular rental reviews, indexation and realignment of agreements to optimise value from rental properties.
“Major projects are in the pipeline for the ZHL group which are set to reshape the architecture of Zimbabwe and the region’s financial services landscape. Such projects are on the back of the group’s focus on cash generation coupled with its innovative use of data thanks to the now established ZHL ecosystem,” he said.
“In line with its new culture, of the Eagle, the ZHL team is excited and energised to seek out opportunities notwithstanding the turbulent economy environment. We look forward to sharing and embedding that same culture with the investing public as we go through 2022.”
Kudenga said the ZHL ecosystem had been strengthened and the group would ensure business continuity anchored on technology utilisation and optimisation.
He added that the restoration and strengthening of heartland investments was under finalisation with the delink of ZPI (asset owning) and Zimre Property Services (service offering) having been completed.
“The integration of shared services across the entire group to achieve an optimised business operation is currently underway. This will see a reconfigured business structure that is lean and efficient going forward. The internal reorganisation to enhance competitive capital mainly in the region is steadily gaining traction, and this will lead to strengthened regional capacity and performance,” he said.
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