TINASHE MAKICHI
A deal that could have seen the country’s largest financial services group, Old Mutual Zimbabwe acquiring funeral assurer Moonlight Funeral Assurance as part of its forward integration strategy, is said to be in limbo, Business Times can report.
The proposed deal was meant to complement Old Mutual’s life business.
A few years ago, Old Mutual Zimbabwe and Moonlight launched a funeral product, the Moonlight Cash Plus, targeted at low income earners. The product offers funeral services and cash payouts.
Well-placed sources told Business Times this week that the proposed deal was on the verge of collapse after the two parties failed to agree on certain aspects of the deal.
“The Moonlight top executive refused their offer because they felt that they were being short-changed and there is another fish frying at the moment,” a source who requested anonymity said.
Efforts to get a comment from Moonlight chief executive Chomi Makina were futile.
Old Mutual Zimbabwe spokesperson, Lillian Mbayiwa said the financial services group would continue to explore opportunities for collaborations and partnerships in the insurance industry. She said Old Mutual continues to partner with Moonlight on the Moonlight Cash Plus Funeral Plan and Enhanced Tiered Funeral Service with higher cash benefit.
“The Old Mutual Group Zimbabwe will continue to explore similar opportunities for collaborations and partnerships that will help deliver world class customer experience for our clients,” Mbayiwa told Business Times.
Moonlight also runs the Mashfords Funeral Parlours.
The deal came at a time when the insurance sector regulator, the Insurance and Pension Commision (IPEC), was imploring funeral assurance companies to ensure that they are compliant with the minimum capital requirement and that they hold enough assets to cover their liabilities as and when they fall due.
“The funeral assurance industry players should strive to comply with applicable laws and regulation, especially the minimum required capital and the minimum required prescribed asset ratios to avoid regulatory sanction from the commission,” IPEC said.
Moonlight Funeral Assurance has over the years spread its wings across the country.
According to a sector report by IPEC, the funeral assurance sector’s inflation adjusted gross premium written (GPW) increased by 158.28% to ZW$56.90m for the quarter ended March 31, 2021 from ZWL$22.03m recorded in the same period last year.
IPEC said all players recorded growth of above 100% in GPW, and none of the players recorded negative growth.
But the insurance and pensions’ regulator warned funeral assurers to gird their loins as they face intense competition from life assurers writing funeral business.
For the quarter ended March 31, 2021, life assurers wrote inflation adjusted funeral assurance business worth ZWL$852.56m which was 14 times more than the ZWL$56.90m written by the dedicated funeral players.
