- Net premium written up 118%
- Premium reviews done to preserve value
- Profit declined to ZW$320.27 million
- Total income slumped by 67%
Harare – Fidelity Life Assurance of Zimbabwe Limited posted a 118% growth in inflation adjusted net premium written to ZW$441 million for the half year ended 30 June 2021 from ZW$218.3 million paced by premium reviews, new business acquisition, and organic growth from an existing book.
In a statement accompanying the Group’s half year results, chief executive officer, Reuben Java said the premium reviews were effected to ensure there was commensurate preservation of value in respect of the policyholders’ policies.
“A deliberate choice of markets and expansion of distribution channels resulted in the writing of new business including US$ denominated policies and this contributed to improved top line growth in addition to organic growth of the existing book as a result of product innovations which commanded higher premiums,” Java added.
However, the Group’s total income (including investment income) for the six months declined by 67% to ZW$933.8 million due to insignificant fair value adjustments on investment property and equities.
Chairperson Fungayi Ruwende said the fair value of the investment property is mainly driven by movement in the exchange rate which was stable during the first half of 2021 as compared to the same period the prior year.
Profit for the period declined by 74% to ZW$320.37 million from a comparative 2020 half year of ZW$1.2 billion.
“The depressed profitability for the period is as a result of a decline in exchange rate differences arising from the translation of foreign operations and foreign currency denominated assets due to stabilisation in the exchange rate which was experienced in the current year,” Ruwende said.
Fidelity Life’s total assets marginally dropped to ZW$6.604 million from ZW$6.606 million in 2020.
Total expenses for the half year increased by 90% to ZW4101.7 million while management expenses grew by 35% which was relatively low compared to inflation and growth in revenue.
Java added that the low growth in management expenses is a testimony to the management’s commitment and discipline to tightly rein in controllable expenses and improved efficiencies in the value chain aided by leveraging on digital technologies.
Looking forward, the Group is committed to creating long term value for its shareholders and clients through asset preservation efforts which include adopting an investment strategy focusing on real growth, a scrupulous of US$ generating markets, and diversifying into the SADC region.
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