• ZHL will prioritise recapitalising its reinsurance cluster and advancing the Great Africa Trek after insurance contract revenue in the business increased by 28% to US$26.43
• The planned capital injection is intended to expand underwriting capacity, support larger regional risks, improve cash generation and strengthen the platform used to grow other insurance and financial services businesses
• Future value will depend on disciplined capital deployment, stronger risk retention and higher returns from the African operations already established by the group

Harare - ZimRe Holdings Limited, a diversified financial services group will prioritise recapitalising its reinsurance cluster during the remainder of 2026 as part of the Great Africa Trek, using additional balance sheet capacity to support larger risks, deepen its African operations and strengthen earnings from a business that generated US$26.43 million in insurance contract revenue during the five months to May.

The group is directing capital towards reinsurance because the cluster has become its largest insurance revenue contributor and the principal platform for regional expansion. Stronger capitalisation would allow ZimRe to increase underwriting limits, retain a larger share of premiums and support insurers handling infrastructure, mining, energy, agriculture and industrial risks across the continent.

“Management’s focus will be directed towards advancing the recapitalisation of the reinsurance cluster and the Great Africa Trek, strengthening cash generation, optimising strategic assets and revitalising underperforming operations,” the group said in its trading update presented at the 2026 annual general meeting.

The strategy follows a period of stronger group performance, total income increased by 20% from US$41.61 million to US$49.93 million during the five months to May 2026. Insurance contract revenue rose by 23%, non insurance income increased by 99% and profit advanced by 5% to US$10.10 million.

Reinsurance recorded the strongest absolute revenue contribution among the group’s insurance operations. Insurance contract revenue increased by 28% from US$20.57 million to US$26.43 million, driven by new business, organic expansion and increased underwriting capacity across the cluster’s operating entities.

The company said the cluster’s performance in domestic and export markets created a strong platform for further expansion. Its priorities include deepening brand visibility, improving market performance, strengthening earnings and enhancing cash generation.

Recapitalisation now becomes the link between that operating momentum and the next stage of growth. Reinsurers require sufficient capital to absorb claims, maintain regulatory solvency and support the volume and complexity of risks written. Higher capital expands the amount of business the company can accept while preserving compliance with prudential requirements across individual jurisdictions.

The capital decision can increase the value of the African network already built through the Great Africa Trek. The group can use a stronger reinsurance balance sheet to participate in larger treaties, support higher value corporate risks and retain premium income that would otherwise be transferred to international reinsurers.

Greater premium retention also expands the pool of funds available for investment. Insurance companies invest premium inflows before claims fall due, creating earnings from both underwriting and investment activities. The value of recapitalisation will therefore be measured through underwriting margins, investment returns, cash generation and capital efficiency.

The reinsurance platform also gives ZimRe a route for expanding other products across regional markets.

Life and pensions insurance contract revenue increased by 12% to US$6.68 million during the reporting period. Zimbabwe contributed 81% of cluster income, while Vanguard Life Assurance of Malawi contributed 13%, down from 27% in the comparable period after investment income declined.

ZHL plans to extend the Great Africa Trek into life and pensions by using the existing reinsurance footprint to replicate established products in new markets. This approach can reduce development costs, shorten market entry periods and use relationships already created with insurers and regulators.

Short term insurance total income increased by 7% to US$2.25 million. Insurance contract revenue rose by 2% to US$2.01 million, while core insurance activities increased their contribution to 64% of insurance revenue from 56% during the comparable period.

Property revenue increased by 31% to US$1.09 million, supported by stand sales and rental income. Occupancy remained at 87% and rental collections averaged 93%. Total property income rose by 270% to US$3.89 million after investment income increased.

Wealth management recorded the fastest percentage growth across the group. Total income increased by 71% to US$2.38 million, supported by diversified revenue streams and organic growth. Micro lending and asset management generated 45% and 35% of cluster income respectively.

Insurance broking remained the weakest operation. Total income declined by 24% to US$460,000 as clients reduced insurance portfolios under subdued economic conditions. Management is pursuing broader market initiatives and regional collaborations to diversify the business and revive growth.

The differences in cluster performance explain why management has placed reinsurance recapitalisation and cash generation at the centre of its outlook. Reinsurance already carries the greatest revenue scale and has direct links to the group’s insurance distribution, investment management and regional expansion plans.

The strategy now moves ZimRe from geographic expansion into capital optimisation. The Great Africa Trek gave the group access to multiple African markets and reduced its reliance on Zimbabwe. Recapitalisation is intended to raise the amount of business those operations can underwrite and improve the earnings generated from the established network.

Execution will require strict underwriting discipline. Additional capital can support higher premium volumes, though the quality of the risks accepted will determine whether growth produces sustainable shareholder returns. Pricing, claims management, catastrophe protection and liquidity will remain central to the outcome.

Capital allocation across jurisdictions will also require careful management. Insurance regulators apply separate solvency and capital rules within each market, which means capital held by the group cannot always be deployed freely across all subsidiaries. Management will need to direct funds towards operations with the strongest combination of market demand, risk quality and expected return.

African insurance markets provide a growing pipeline of complex risks as investment expands across energy, mining, infrastructure, transport and manufacturing. These projects require insurers and reinsurers with sufficient technical expertise and balance sheet capacity to support large claims.

ZimRe’s regional presence gives it access to that opportunity. The recapitalisation programme will determine the scale at which the group can participate, the amount of premium it can retain and the returns generated from its African operations.

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