Zimbabwe Stock Exchange-listed Fidelity Life Assurance tumbled to a loss of $1,3 million in 2017 against the restated profit of $6,4 million in the prior year attributed to shareholder asset write-offs.
The loss comes despite a 7% increase in the group’s total revenue to $55,9 million from $52,4 million recorded in 2016.
“As part of the response to the results of the forensic audit highlighted in my report last year, the loss after tax for the year ended December 31, 2017 reflects various shareholder asset write offs to reflect historical lapses in internal controls both in Zimbabwe and Malawi. There was no prejudice to policyholder funds, as the write offs were fully provided against shareholder funds,” company chairperson, Fungayi Ruwende said in a statement accompanying the financial results.
Fidelity Life’s Southview Park stands sales dipped 4% to $23,4 million last year at a time the company incurred more costs on property development. In 2016, stands sales at Southview raked in $24,2 million.
“Apart from a challenging operating environment, revenue was also subdued by a management transition period for the company that resulted in interruptions to the strategic focus. At $14,2 million, gross insurance premiums came in 7% lower than the $15,4 million in prior year,” Ruwende said.
Claims were reduced by 41% to $4,9 million last year from $8,3 million in 2016.
Property development expenses increased to $15,9 million against $13,3 million in the prior year.
Finance costs were down 16% to $1,7 million following the partial redemption of the SouthView Park bonds during the year.
The company’s Malawi-based subsidiary, Vanguard Life Assurance recorded an increase in premiums arising from growth due to new business. Premium income increased 40% to $3,5 million from $2,5 million in 2016.
Despite an increase in premium income, the unit reported a loss for the year of $600 000.
Ruwende said the new management team was driving a fundamental transformation in how the company delivers on the expectations of key stakeholders.
The results of the clean up exercise will cement our solid foundations and position us for sustainable growth going forward,” he said.
Rueben Java was last year appointed as chief executive officer to replace the late Simon Chapereka.