Tropical Reinsurance Company Limited (Jul 2022)

Tropical Re was formed in 2007 as a reinsurer domiciled in Zimbabwe. The reinsurer is a subsidiary of Nzou Holdings Limited (“the group”), which owns 100% of shares through investment companies; TN Investments (50%) and Taquila Trading (50%). The group has other subsidiaries, which include Alliance Insurance Company Limited (100%), Alliance Health Limited (100%), Hunt Adams Insurance Brokers and Ashleen Investments Limited (a micro-finance company). Furthermore, the group owns 100% shareholding in Africa Pride Investments; a short-term insurance company domiciled in Zambia. The group does not consolidate the subsidiaries, although Tropical Re evidences high premium reliance on Alliance Insurance Company Limited (“Alliance Zimbabwe”) and to a degree Africa Pride Investments (“Africa Pride”). In addition to business support, the group provided capital support to Tropical Re in 2017, following an elevated operating loss that reduced capital. While Alliance Zimbabwe is the largest group subsidiary, Tropical Re is the only reinsurance subsidiary, underpinning its strategic importance.

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Stanbic Bank Zimbabwe Limited (Jul 2022)

Stanbic Bank Zimbabwe Limited is incorporated and domiciled in Zimbabwe and provides a wide range of commercial banking and related financial services. Stanbic Zimbabwe’s full-service offering attracts mainly a corporate clientele, supported by an extensive local presence and a strong reputable brand with global links. Stanbic Zimbabwe is also classified as a domestic systemically important bank (“D-SIB”).

The bank is a wholly owned subsidiary of Standard Bank Group Limited (“SBGL”) and is not a material asset or revenue contributor. As a result, the analysis was based on a mixture of the bank’s standalone credit analysis and group support characteristics. Only the inflation adjusted results are audited, and as such, GCR does not use historical figures in its analysis.

The financial results were prepared in accordance with IAS 29 which requires that the financial statements of any entity whose functional currency is the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the reporting date and that corresponding figures for the previous period also be restated in terms of the same measuring unit.

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Old Mutual Insurance Company (Private) Limited (Jul 2022)

OMICO is a 100% owned subsidiary of RM Insurance Holdings, which is in turn an Old Mutual Zimbabwe Limited (“OMZIL”) subsidiary, through a 59% direct shareholding by OMZIL and 41% Mutual and Federal Company of Zimbabwe Limited stake. The insurer rebranded from the previous RM Insurance to Old Mutual Insurance Company (Private) Limited in 2014 to align with the group. OMICO’s main business is short term insurance.

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Hyperinflation has played havoc with Zimbabwe’s Insurance sector; however, sustained policy consistency could allow for gradual recovery (May 2021)

Overview

  • Protracted economic challenges in Zimbabwe, culminating in a change of functional currency and the onset of hyperinflation, has resulted in drastically reduced insurance penetration and gross premiums in 2019 and 2020.
  • Due to hyperinflation, earnings came under significant pressure with the majority of insurers registering inflation adjusted net losses emanating from net monetary losses.
  • The long-term sector has been particularly impacted, with low consumer confidence due to previous negative experiences of hyperinflation and currency instability in 2008/9. However, GCR believe the regulatory environment is enhanced relative to 2008/9 and recent policyholder protection rules are likely to improve market confidence.
  • Additionally, new regulatory directives have been introduced to assist the insurance sector in coping with the current economic environment. These measures anchor the insurance sector’s potential for recovery.
  • GCR has maintained the insurance sector score at ‘2.75’ after a reduction from ‘3.00’ in 2020 however, the sector score could come under further pressure over the medium-term if earnings do not recover in line with expectations.
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A long road to recovery for Zimbabwe and its corporates (March 2022)

Overview

  • The Zimbabwean economy is in better shape relative to two years ago. However, growth projections may be lower than the 5.5% forecast for 2022.
  • Political interference, currency instability, and a relative lack of monetary policy consistency remain some of the largest hurdles for businesses.
  • The risks facing the corporate sector lie in the wide disparity between parallel market and official exchange rates, sustained high inflation, and deterioration of the exchange rate. Global shocks may also exacerbate these risks.
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Zimnat Li on Insurance Company Limited – December 2021

Zimnat Lion is a wholly owned subsidiary of Masawara Investments Mauritius Limited (“MIM”), which is majority (60%) owned by Masawara Holdings Mauritius (“MHM”). MHM is 100% owned by Masawara Mauritius Limited, which is in turn 100% owned by Masawara Plc (“Masawara”). Masawara is a Jersey registered company focussed on acquiring interests across a range of sectors, including agriculture, mining, real estate and telecommunications. The remaining 40% stake in MIM is held by Sanlam Emerging Markets (Proprietary) Limited (“SEM”), which was acquired in 2015.

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Zimnat Life Assurance Company Limited – December 2021

Zimnat Life was established in 1959 as the Insurance Company of Rhodesia, a life company specialising in the emergent market. In 1981, the company was renamed to Zimnat Life, following the independence of Zimbabwe. The company has diversified into asset management, medical aid provision and micro financing over the years. Zimnat Life is a wholly owned subsidiary of Masawara Investments Mauritius Limited (“MIM”), which in turn is majority (60%) owned by Masawara Holdings Mauritius (“MHM”). MHM is 100% owned by Masawara Mauritius Limited, which in turn is 100% owned by Masawara Plc (“Masawara”). Masawara is a Jersey registered company focussed on acquiring interests across a range of sectors, including agriculture, mining, real estate and telecommunications. The remaining 40% in MIM is held by Sanlam Emerging Markets (Proprietary) Limited (“SEM”), which acquired the stake in 2015. While Zimnat Life is consolidated by Masawara Plc, the insurer’s contribution to the group’s revenue and assets is viewed to be immaterial. As such, the analysis was conducted on a stand-alone basis.

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NICOZDiamond Insurance Limited – October 2021

NICOZDiamond Insurance Limited (“NICOZDiamond”) is a 100% owned subsidiary of First Mutual Holdings Limited (“FMHL”), listed on the ZSE. NICOZDiamond emanated from the merger of previously state-owned NICOZ Insurance Company and Diamond Insurance (formerly Pearl), in 2002 and it also merged with Tristar insurance in 2019. The group mainly comprises the wholly owned Zimbabwean insurance operation, complemented by regional interests in Malawi and Mozambique. The rating is at NICOZDiamond group level.

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Grand Reinsurance Company (Private) Limited

Grand Re is a wholly owned subsidiary of Masawara Investments Mauritius Limited (“MIM”), which in turn is majority (60%) owned by Masawara Holdings Mauritius (“MHM”). MHM is 100% owned by Masawara Mauritius Limited, which in turn is 100% owned by Masawara Plc (“Masawara”). Masawara is a Jersey registered company focussed on acquiring interests across a range of sectors, including agriculture, mining, real estate and telecommunications. The remaining 40% stake in MIM is held by Sanlam Emerging Markets (Proprietary) Limited (“SEM”), which extends to the short term, long term and reinsurance arms of the group (Zimnat Lion, Zimnat Life and Grand Re). The reinsurer’s medium term strategic objectives include achieving sound growth, while maintaining strong underwriting profitability. In this regard, management expects to continue to focus on the quality of the book of business, while moderating costs and introducing innovative products and distribution channels.

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Nedbank Zimbabwe Limited – October 2021

Nedbank Zimbabwe is incorporated and domiciled in Zimbabwe. The bank’s full-service offering attracts mainly a corporate clientele. Nedbank Zimbabwe’s key functional business lines, being corporate and retail banking, business development and institutional banking and treasury are supported by a modest distribution network.

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