20 July 2014

Zimbabwe: Boost for First Mutual Premiums

First Mutual Life Assurance Company's (FML) franchise with Dunamis Private Limited is expected to contribute about 13% of the budgeted new business to FML's premium income across all lines of business, a company official has said.

The franchise was authorised to give financial advice and distribute insurance products on behalf of FML using the brand name of the insurance company only.

Speaking at the company's franchise launch in Harare recently, FML managing director, Ruth Ncube said the franchise was an additional and complimentary delivery channel for FML products.

"It is expected to contribute about 13% of budgeted new business to FML's premium income across all lines of business including individual life, corporate or employee benefits business, health insurance business and short term insurance," Ncube said.

She said FML provided financial assistance to set up the particular franchise.

The model would enable the franchise holder to operate with lower running costs and penetrate areas where FML could not reach in an economic manner, she said.

Ncube said the company was looking at establishing and empowering additional entrepreneurs and introducing a similar model across the country.

Speaking at the same event, Youth Development, Indigenisation and Empowerment minister Francis Nhema said the FML's launch of the franchise was a great contribution to the economic empowerment programme under Zim Asset.

"I have no doubt that the boldness shown by FML as a pioneer in Zimbabwe to franchise insurance business will bear fruit and just by looking at our neighbour South Africa, this distribution model has been mainly used for life products and South African companies obtain between 10 to 15% of their premiums from franchises while agents bring in just above 20%," Nhema said.

The minister urged the franchise to ride on FML's strong brand to further grow the business. He said compromising on the quality of service would have a negative effect on FML which had been in existence for over 100 years.

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