CELL Funeral Assurance’s new shareholders have injected $750 000 into the business to increase the underwriting capacity as the fourth largest funeral assurer embarks on a turnaround strategy.
by own staff
The shareholders took over the company in January. It was part of Cell Holdings which has interests in short-term and medical insurance among others.
Chief executive officer Samuel Sithole told NewsDay that the shareholders, that comprise two finance companies, have also promised that Cell would be compliant with the minimum capital regulations of $1,5 million set by the Insurance and Pensions Commission (Ipec).
Sithole said the business had been starved of the much-needed capital.
“The business had been starved of much needed capital. However, the new shareholders are on track to recapitalising the business to the tune of $1,5 million as required by Ipec. So far, $750 000 worth of investment has been injected into the business,” he said last Wednesday.
In the fourth quarter ended September 30 2014, Cell had net assets of $180 000 down from $763 000 in the comparable period in 2013.
Sithole said the company has a number of new products coming up for the market. “This coupled with key partnerships with corporate leaders should see us realise the short-term goal of closing the market gap and becoming a market leader,” he said.
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“We are in phase one of implementing our turnaround strategy. We hope to improve on our margins and ensure we meet our set operating targets within the next two years.”
Sithole said focus was now on retaining existing customers while fostering new partnerships going forward. He said investment was already being channelled into key markets.
“A parlour is being set up in Zvishavane and a new hearse for that market arrived in Harare just before Easter. We now await delivery of the remaining new fleet of vehicles that includes buses and hearses, these have been procured for both our Harare and Zvishavane market,” he said.
Sithole said the company hopes to maximise on its strength and on the cell concept that “has been a success with large corporates and various groups including churches”.
“We hope to significantly increase our market share within the next two years and a strategy to deliver on this has already been presented to board,” he said.
Sithole said Cell has a sizeable niche market serving the local and diaspora markets. In the quarter ended September 30 2014, Cell had net written premium of $1 209 000 down from $1 234 000 in the same period in 2013.
Ipec said three firms had 82% of net premiums during the period down from 85% in 2013.
“The Commission continues to encourage product innovation both in terms of benefit structure and distribution channels in the wake of growing competition from life companies who have bigger balance sheets,” Ipec said.
