Harare, Zimre Holdings (ZHL) has re-modeled the business thrust of CredSure to become an underwriting management agency as the group among other things seeks to lower business acquisition costs.
Group chief executive officer Stan Kudenga said at an analyst briefing that the transaction was consummated at a cost of $1.5 mln.
“People may ask why we are going into CredSure when exited NicozDiamond and carry on the same model?
“The bottom-line is that CredSure is going with a different model. At NDI we were following completely a different model hence CredSure is now going for what we call underwriting management agency,” he said.
He said at CredSure, the number of staff has since been cut down to less than 10 from almost over 30 in line with the new model.
“We are investing in IT, which is going to allow us to create entrepreneurs out of our business model and we are going to focus on specialized areas,” he said.
Kudenga said under the current industry environment, the major component that is key is business acquisitions costs, that is in terms of commission and everything and this comes from the broker power.
He said most brokers now have so much power and on direct broker commission, when it comes to re insurance its worse hence at the end of the day you end up seeing that for every dollar, every 50% is going to the broker.
“There is no business that can survive in that way before even factoring other costs. To that end, CredSure now getting into direct business acquisition and we will make sure that we provide specialized areas,” he said.
CredSure has been the only company which has the minimum business acquisition costs according to IPEC quarterly statistics.
“We also want to go into engineering, construction directly, in terms of business acquisition, so the model is not to replacing NDI. Structurally we had issues with NDI,” he said.
Information on its website is that CredSure was established in 1965 by a Consortium of Banks, Insurance,Reinsurance Companies in partnership with the Industrial Development Corporation (IDC) to among other objectives:-
Promote Zimbabwe exports by protecting exporters from commercial/political payment risks.
Facilitating Export finance by cession of Credit Insurance Policies to Financial Institutions and Suppliers.
Promote Domestic business by protecting against commercial payment risks.
The company is also a specialist provider of Construction Bonds and Guarantees As of the first of November 2007, CredSure decided to extend its business to include short-term insurance classes.