Aon, First Mutual submit regularisation plans

TWO insurance firms Aon Zimbabwe and First Mutual Holdings Limited (Afre) have submitted plans to regularise their shareholding structure in line with the sectors’ laws, the insurance commissioner said.

Report by Victoria Mtomba

Insurance Pension Commission (Ipec) commissioner Manett Mpofu said the Act stipulates that a shareholder should not hold more than 40% in any insurance firm.

“The Act says no shareholder should hold more than 40%. In the case of Afre NSSA (National Social Security Authority) came to the rescue and for them to shed excess shareholding, it will take some time,” Mpofu said.

“With regards to Aon, one shareholder was 40%. They are sorting out on the shareholding. We have received the unbundling papers,” she said.

Mpofu said in the case of Aon Zimbabwe which has to regularise its shareholding and restructure its operations as per legislation.

She said when the new law came in 2005, Aon was supposed to have reinsurance broking, local broking and employees’ benefits (pensions) units.

It had failed to do so though the company is taking steps towards compliance.

NSSA moved into Afre in 2011 to revive the company that was facing corporate governance and capital challenges.

Mpofu said in the first five months of the year the insurance and pension sector recorded a slight improvement as it relies on the performance of the economy.

“If the economy is doing well the insurance sector would do well. If things improve, it would be better. The salary is little. We have seen companies failing to pay salaries on time. We are hoping that if the election is conducted well things should be well.”

The insurance industry is on the increase spurred on by the use of multi-currencies that have brought back the confidence in the sector.
Confidence had reached its lowest ebb during hyperinflation when firms failed to honour their obligations.

In 2011 total gross premiums written by direct short-term insurers increased to $159 million from $117 million. The sector has grown from $600 million during the hyper inflation era.

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