- Revenue grew by 45% to ZWL$48 million
- Total revenue closed at ZWL$180 million
- Firm solvency position
Harare – Insurance Company, Fidelity Life Assurance of Zimbabwe posted a bolstered performance for the three months ended 31 March 2020, with a spike in revenue growth.
In a trading update, the company said core revenues closed the quarter at ZWL$48 million, a 45% hike from ZWL$33 million registered in the same prior comparable period.
The company attributed the boost in revenue performance to net investment income which resulted in a 45% growth in total revenue which closed at ZWL$180 million compared to ZWL$124 million in the same period last year.
The ZSE All share index soared by 100% in the period under review, in turn, boosting Fidelity’s income since Fidelity’s investments are largely on the stock market.
The Malawi business and balance sheet growth in Fidelity Life Assurance of Zimbabwe continue to be key drivers of the Fidelity’s revenue performance, both having contributed 38% each to the Group’s core revenue.
Nonetheless, profit before taxation for the company dropped by 7% from ZWL$86 million in the same period last year to ZWL$80 million during the period under review.
The company said the decrease in profit was due to a sharp increase in total expense largely driven by inflationary pressures and continuous weighing down by re-estimation of foreign dominated project completion costs for Southview water works totaling to ZWL$49 million which is 50% of total expenses, driven by the weakening of the local currency.
The increase in the provision was to some extent offset by increases in value of asserts held to hedge the risk thus enabling the Group to still record a profit.
The company’s solvency position remained firm during the period under review as it had excess assets of ZWL$131.3 million against a required minimum regulatory capital of ZWL$75 million.
Fidelity highlighted that impact of the coronavirus on its financial performance was not reflected in the period under review albeit the impact post lockdown is expected to be reflected in the second quarter trading update.
Also, in line with combating the spread of COVID-19, the business implemented a Business Continuity Framework that allowed it to successfully continue all operations allowing clients and stakeholders to remotely access services and systems online through various digital and electronic platforms.
The company expects the operating environment to remain harsh hence its strategic focus remains on value preservation for key stakeholders inclusive of policyholders, clients, shareholders and employees.
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