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TO HELP WITH RESTRUCTURING
Zambia State Insurance Corporation (ZSIC) has signed a two-year contract with a Zimbabwe-based consultancy company to help it restructure its business.
ZSIC, which is also considering listing on the Lusaka Stock Exchange, is paying a reported K1.5 billion for the two-year consultancy, designed to help the company separate its life and general insurance functions by the end of next year.
The separation of businesses is required under the provisions of Section 3 of the Insurance Act 1997, which it has until the end of 2008 to implement.
African Actuarial Consultants, a wholly owned subsidiary of First Mutual of Zimbabwe, is the consulting company engaged to assist ZSIC. First Mutual itself has already restructured its business and separated its long-term and general insurance divisions.
African Actuarial Consultants was one of three bidders for the ZSIC restructuring contract. It will also be looking at the companys investment, property management, financial management and administration.
The consultancy company started operations in March 2003, having evolved from the actuarial division of First mutual Life Assurance Society of Zimbabwe.
The actuarial profession is a key and indispensable component of the financial services sector, which assesses the financial consequences of risks that business organisations take and gives advice as to measures that should be taken to meet those risks in the future, said African Actuarial Consultants.
Companies that are unbundling, for example, need to know their full value and also the value of each of the subsidiary companies so that they can properly share the assets of the parent company and also set up proper pension and other structures for their employees. Pricing new insurance products, retrenchment calculations and provisions for ill health funding are among other tasks that actuaries are called upon to perform. The calculations have to be concluded in a manner that satisfies both the employer and the employee, it added.
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