Harare – Diversified insurance firm, Fidelity Life announced a 44 percent growth in gross premium income to $20.5 million for its financial year ended 31 December 2018, buoyed by the Group’s drive to refocus on its core life assurance business.
Gross premium earnings in the previous comparative period stood at $14.2 million.
In a statement accompanying the Group’s financial results, Chairman Fungai Ruwende said that Fidelity Life Assurance of Zimbabwe (FLA), which is the flagship company of the group is on a strong positive growth having recorded a 38 percent growth in premium income in the year under review, contributing 78 percent of the Group’s total revenue.
“At $14.8m, premium income now constitutes 35% of the Company’s total income, up from 22% last year,” said Ruwende.
He highlighted that the Pensions business contributed $9.7 million to the Company’s premium income whilst the Life Assurance business contributed $5.1 million, reflecting growth rates of 49 percent and 21 percent respectively against prior year numbers.
Profit before tax increased by 231 percent to $2.3 million, against a comparative of $0.7 million in 2017.
“This growth however eroded by prudent tax provisions of $1.2m which resulted from our tax health assessments conducted during the year on the Group’s activities, resulting in a loss for the year of $0.6m, a 52% improvement to the $1.3m loss reported in 2017,” said Ruwende.
A mix of macro-economic challenges including liquidity challenges impacted on the Group’s performance reflected by a decline in total revenue to $53.4 million from $56.0 million in 2017.
“As such, fair value gains on equities decreased by 30%, down to $3.2m in 2018 from $4.5 m in 2017. Property values remained flat due to illiquidity in the US$ market, resulting in fair value gains on properties of $0.5m, down from $2.9m in 2017,” said Ruwende.
Meanwhile, Fidelity Life Assurance Services contributed 8 percent to the Group’s total revenue making it the third largest revenue contributor behind FLA and Vanguard Life Assurance Company (VLA) based in Malawi, driven by a 20 percent growth in interest income on the subsidiary’s loan book.
VLA recorded a 44 percent growth in revenue to US$6.6 million contributing 12 percent to the Group’s total revenue.
“The growth in revenue for the Malawian subsidiary was largely driven by a 63 percent increase in premium income which increased to US$5.7m, up from US$3.5m in 2017,” said Ruwende.
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