Fidelity’s revenue up on high gross premium earnings

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    Harare – Zimbabwe Stock Exchange-listed, Fidelity Life Assurance’s revenue for the five months to 31 May 2019 increased by 88% to $25.4 million from $13.5 million recorded in the same period last year driven by a strong growth in gross premium earnings.

    Gross premium income surged 176% from $7.4 million recorded in the same period last year to $24.4 million in the period under review.

    In a trading update at the Group’s AGM held in the capital on Wednesday, chief executive Rueben Java said the growth in premium income was largely driven by 63% growth from the Malawi business, while Zimbabwe operations recorded a 14% growth.

    “The gross premium as a proportion of total revenue is about 80%,” Java said.

    “This is good testimony that our strategy to refocus the business to its core activities is moving in the correct direction.”

    Revenue from other subsidiaries encompassing microfinance, asset management, medical aid, funeral services and actuarial services contributed $4.1 million to the Group’s total revenue which is a 78% increase from $2.3 million recorded in the prior year.

    Income from stand sales decreased on prior year’s performance recorded at $1.3 million to $0.1 million as at 31 May 2019.

    Likewise, income from residential stands decreased by 54% to $1.2 million from $2.6 million in the same period last year.

    Mr Java said total expenses during the review period increased by 136% to $18.9 million from $8.0 million in the prior comparable period driven by claims and commission which increased by 195% and operational expenses which increased by 128% in line with inflation pressures permeating in the Zimbabwe economy.

    The group recorded a combined investment income of $40.8 million which compares favourably against an investment loss of $0.4 million recorded during the same period last year.

    “This reflects massive property uplifts due to currency change and fair value adjustment of our equities portfolio,” said Java.

    On the outlook, Java said the Group remains optimistic of future prospects anchored on three strategic pillars; Growth, Brand Repositioning and Sound Corporate Governance.

    “Cognisant of the current operating environment where inflation is now at 98% as at May 2019, the Group will focus on value and assets preservation for our key stakeholders,” Java said.

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