PICZ is a short-term insurer domiciled in Zambia. It is 99% owned by Finsbury Investments (‘Finsbury’), with the remaining 1% held by an individual. Finsbury is an investment holding company and PICZ is not consolidated into the group. It accounts for around 8% of Finsbury’s total assets and is treated as an unlisted investment by the group thus it is not deemed to be core or to the group or derive uplift from group support.
- In recent years the Zambian Insurance sector’s real growth rate has been limited, impacted by macroeconomic pressures with inflation and limited economic performance ultimately affecting premium growth and penetration of the insurance sector.
- However, GCR believe that the new Insurance Act of 2021, which came into effect on the 20th of May 2021, will have a positive impact on the Zambian Insurance Sector.
- Among other interventions, we expect the Act to help in reducing growth in delinquent accounts, instil discipline in underwriting and other best practices in insurance, including rationalisation of commission structures, and optimisation of reinsurance utilisation.
Emeritus Re Zambia is 99.8% owned by Emeritus International Reinsurance Limited, which is in turn 100% owned by Emeritus Reinsurance (Private) Ltd (“the sub-group”), a 100% subsidiary of Zimre Holdings Limited (“the group”). Emeritus International Reinsurance Limited is an intermediate non-operating holding company. The sub-group, domiciled in Zimbabwe, is the core operating entity of the group, holding reinsurance investments, including subsidiaries in Mozambique, Malawi and Botswana. In addition to the reinsurance sub-group, the group owns other subsidiaries in Zimbabwe (Fidelity Life Assurance Limited, Credit Insurance Zimbabwe Limited, Zimbabwe Property Investments Limited (“ZPI”) and ZIMRE Capital (Private) Limited, an investment banking arm) and an associate investment in CFI Holdings Limited. Also important for the group’s risk uptake is the investment in Cell Insurance Company (Private) Limited (“Cell Insurance”) and Guardian Reinsurance Brokers Limited. In the region, the group has an associate investment in Malawi (UGI Insurance Limited) and notable unlisted investments in Mozambique (Diamond Comphnia de-Seguros) and Eswatini (Lidwala Insurance Company). This business ecosystem is valuable to the operations of the reinsurance business, including Emeritus Re Zambia.
Emeritus Re Zambia contributed less than 10% to the sub-group’s gross premiums, while the latter contributed about 87% of the group’s gross premiums in FY20. Given the reinsurer’s modest contribution to the sub-group’s gross premiums, we assess the credit profile on a stand-alone basis, with consideration for support from the group.