Harare - Fidelity Life said there is clear indication that its core insurance business is on a strong recovery path after registering a 63 percent income growth for the five months to May 31, 2018.

Gross Premium Written recorded strong growth of 44 percent from $5.1 million to $ 7.3 million attributed to a refocusing strategy whereas the business retraced to core activities in insurance. In recent past years Fidelity had increased its exposure to other areas such as property development which took over a greater portion of the total income generated.

Giving a trading update at an AGM on Friday,  newly appointed CE Reuben Java said revenue from other subsidiaries (property, microfinance, asset management, medical aid and actuarial services) contributed $6.2 million, a 93 percent increase from $3.2 million as at 31 May 2017.

“I am happy to share with you that almost all our businesses are performing well compared to last year,” he said.

Java said total expenses  increased by 30 percent from $6.2 million to $8.0 million during the period under review.

“The major drivers are cost of debt restructuring which we had to undertake earlier this year as well as Southview Park revenue reclassification  which was  impacted by prudential accounting.

“However, let me assure you that we will continue to monitor our expenses to ensure that they will not grow at a rate higher than revenue growth,” he said.

Java also said that the underwriting result, which is a measure of value by the management team, delivered a very strong 162 percent increase from $2.1 million to $5.5 million.

He said nvestment income decreased from $1.8 million to negative $0.4 million reflecting the general volatility of the stock market in an election year and in particular the performance of stocks in their portfolio.

Profit before tax increased by 29 percent from $3.9 million to $5.1 million. Going forward, the company said it will be anchored on three strategic pillars, Growth, Repositioning and Governance.

He said on growth pillar, Fidelity current market share in the insurance business is a modest 3 percent positioning them at number six in the industry.

To grow their market share, Java said the company will be focusing on products review, exploring new markets and being flexible in the choice of distribution models to suit different markets.

On the second strategy, he said given the negativity that swirled the brand over the past years, it was the right time to take the brand back to the market, rebuild its image and create top of mind awareness.

Additionally on the third pillar, which is governance, Java said, “As an insurance business we are conscious that the products we sell are not tangible, we sell promises. The value of those promises to customers is in the institutional framework that we create to give them the assurance that we will be there to deliver that promise when it’s due. So it’s a fundamental pillar for us.”