HARARE- Short term insurers Nicoz Diamond and Tristar today published a notice of the proposed transfer of Tristar Insurance to Nicoz Diamond in line with the FML takeover plans.
In 2017, FML Holdings, one of the largest insurance groups in Zimbabwe, acquired a controlling stake in Nicoz Diamond which by then was a standalone entity offering short-term insurance. The rationale according to FML was to consolidate Nicoz Diamond to the existing business of FML notably its short term insurance arm Tristar which was relatively smaller in size to NDI.
In a scheme exercise earlier this year, NDI shareholders voted in favour of the mandatory offer by FML to acquire the remaining 19.08% shareholding in NDI resulting in a 100% takeover of the entity. Subsequently NDI was delisted on the ZSE on August 10, 2018 paving way for the consolidation with Tristar which is presently underway.
As a value proposition to shareholders, NDI said the takeover and subsequent merging with Tristar Insurance would bring benefits such as enlarged clientele base and increased new business underwriting capacity.
The company further stressed that it had a tall order ambition which could only be realized with scale and leverage. “NDIL’s short-term goals are to consolidate its position on the local market and entrench its market leadership position through efficient processing of claims, excellent customer service, introducing customer convenience and coming up with market responsive solutions” the company said in the June scheme circular meant to entice shareholders into submission.
“In the medium term, we intend to enhance the regional investments and improve their market positioning whilst improving returns from them for diversification of income streams. In the long-term, the business aims to be a strong and well recognised African insurer with significant presence on the African continent” the report went on.
In a statement accompanying its interims, FML CE Douglas Hoto said the acquisition of NDI had strengthened the group’s position in a market where flight to quality has become more prevalent.
In the 6 months period to June, FML more than doubled its bottomline which came in at $8.66 million compared to $4.2 million in the prior year. This was the first time NDI results were consolidated to that of FML.
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