- Net earned insurance premium drop by 5%
- Insurance premium revenues down 21%
- Profit before tax settled at ZWL42.37 million
Harare – FBC Insurance Company posted a negative 2020 performance due to the harsh economic headwinds that persisted for the greater part of the year leading to the insurance business recording a decrease of 5% in net earned insurance premium to ZWL845 million from ZWL886 million achieved in the prior comparative period.
Furthermore there was a significant decrease in insurance premium revenues of 21% which was offset by an improvement in premium ceded to reinsures and retrocessionaires of 44%.
The Covid-19 pandemic lockdown effects and the hyperinflationary environment had an initial negative effect on the insurance industry at large. This however, took a positive turn when the regulatory authorities subsequently permitted the underwriting of insurance policies in foreign currency.
According to the Group’s latest results publication, FBC Insurance recorded a profit before tax of ZWL42.37 million, largely influenced by the growth in investment income.
However, the core business of insurance services continues to be affected by low disposable incomes and low industrial capacity utilisation culminating in reduced insurance uptake.
“Meanwhile, the sustained mismatch in premium collections to claims has continued to pose serious operational challenges to the sector, with industry players failing to satisfy both policyholder and fund member expectations said Group Chairperson John Mushayavanhu.
The Group also highlighted that the insurance sector continued to battle extremely challenging operating conditions, characterised by currency volatility and high inflation.
“During the period under review, the sector suffered an additional setback brought on by Covid-19-related restrictions, which dampened demand for both short and long-term insurance services, said Mr Mushayavanhu.
Private insurance consumption remained under significant pressure throughout the period, due to high rates of unemployment, low capacity utilisation and business closures. Prospects for the industry have however, been renewed given that insurers are now underwriting business in foreign currency.
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