· Total revenue up 90%
· Investment income increased to ZW$109.1 million
· Net premium written surged by 75%
Harare- ZSE-listed insurance group, Fidelity Life Assurance reversed its prior-year after-tax loss of ZW$65.8 million to post an inflation-adjusted profit of ZW$274.9 million for the full year ended 31 December 2021.
The Group’s total revenue for the year was up 90% to ZW$3.3 billion from a comparative 2020 of ZW$1.7 billion driven by investment income and net premium written which increased by 99% and 75% respectively.
Investment income increased to ZW$109.1 million from ZW$55.08 million while net premium written increased from ZW$611.8 million to ZW$1.07 billion.
“The growth in net premium written was driven by aggressive premium reviews and strong organic growth of the life book as well as significant inflows from new products launched which were supported by market diversification and enhancement of the distribution channels,” Chairman Livingstone Gwata said in a statement accompanying the Group’s financial results.
Gwata added, “Investment income was mainly driven by fair value gains on investment properties and equities.”
Fidelity Life’s total expenses for the period under review increased by 66% to ZW$2.9 billion from ZW$1.76 billion recorded in the prior year due to net benefits and claims, changes in insurance contract liabilities and operating expenses which grew by 172%, 97% and 75% respectively.
“Operating expenses were mainly driven by the increase in the rate of inflation and the exchange rate movements whilst net benefits and claims were driven by high COVID-19 related claims resulting from retrenchments and death claims,” Gwata said.
Meanwhile, Gwata highlighted that the subsidiary in Malawi continues to provide a good hedge to the Group against the unstable currency movements and the adverse impact of the rate of inflation in Zimbabwe.
Zimbabwe has been experiencing currency and inflation challenges for some time now with the local currency continuing to devalue against the US$ and inflation going back to three digits since June last year.
Going forward, Gwata said with the current operating environment characterised by soaring prices as a result of supply chain disruptions caused by the COVID-19 pandemic and the Russia, Ukraine war, the resurgence of inflation, and doubt in the attainment of the projected 5.1% growth in agricultural output and, in turn, the GDP growth of 5.5% in 2022, investment portfolio diversification is going to be the Group’s priority in the current financial year.
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