- Fidelity Life achieved historic milestone, crossing ZWL 100 billion in net profit during the 12-month period to 31 December 2023
- Strong growth in insurance contract revenue and investment income drove the net profit to soar to ZWL 243.4 billion, marking a remarkable increase of 9945% from the previous year
- Despite inflationary challenges, Fidelity Life recorded significant growth in insurance service result and net investment income, supported by innovative product development and favorable market adoption
Harare- Fidelity Life, a diversified assurance company, achieved a significant milestone by surpassing ZWL 100 billion in net profit for the first time. During the 12-month period ended 31 December 2023, net profit skyrocketed from ZWL 38 billion to ZWL 243.4 billion.
This remarkable growth was attributed to the rise in insurance contract revenue and investment income. Profit for the year soared to ZWL 101.1 billion, a staggering increase of 9945% from ZWL 1 billion.
Established in 1977 and listed on the Zimbabwe Stock Exchange on January 1, 2003, Fidelity Life Assurance of Zimbabwe Limited operates as a holding company, offering a wide range of products and services. These include life assurance, employee benefits, asset management, medical insurance, funeral assurance, actuarial services, and residential property development. The company manages pensions, provides funeral insurance and microfinancing in the informal banking market.
Their actuarial services encompass life and general insurance, healthcare insurance, investments and finance, as well as funeral assurance schemes. Asset management services consist of unit trusts, money market funds, equity funds, balanced funds, and advisory services. Additionally, Fidelity Life provides medical aid services through various packages such as the access health package, express health package, and foundation health package.
The company operates in Zimbabwe and Malawi, with the latter offering life assurance and pension products.
The substantial growth in profitability was primarily driven by the remarkable increase in insurance contract revenue, which experienced a growth rate of 242% compared to the previous year. This revenue surge was due to the successful development of innovative products and increased market adoption of Fidelity Life's offerings.
The Vaka Yako product played a significant role in the growth of premium inflows, contributing 83% of the individual life premium.
The Zimbabwe operations accounted for 62% of the premium inflows, up from 56% in 2022, while the Malawi operations made up the remaining 38% (down from 44% in 2022).
Despite the challenging inflationary environment in Zimbabwe and the regional business operations, the company managed to achieve a 280% increase in insurance service result, supported by real growth in insurance contract revenue.
However, this growth was offset by an increase in insurance service expenses, driven by higher claims and directly attributable costs.
Fidelity Life's net investment income grew by 91% compared to the previous year, reaching ZWL 70.8 billion on an inflation-adjusted basis due to fair value gains from investment property, equities, and interest income from money market investments.
Due to the Group's capital requirements, the board has decided not to recommend a final dividend for the year ended December 31, 2023, in accordance with the Group's dividend policy.
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