Fidelity profit up 57pc

HARARE - Listed short-term insurer Fidelity Life Assurance of Zimbabwe (Fidelity) recorded a 57 percent growth in after-tax profit to $7,8 million in the half year to June 30, 2012.

The group’s total income increased to $13 million from $8,9 million during the period.

Premium income — representing 50 percent of total income — stood at $6,5 million, up 16 percent from previous comparable period.

Underwriting surplus grew six percent to $3,3 million from $3,1 million.

Solom Tembo, Fidelity chairperson, said the group’s companies recorded improved profits with Fidelity Life Assurance (FLA), Fidelity Funeral Assurance (FFA), Malawi subsidiary Vanguard Life Assurance (Vanguard) and Fidelity Life Financial Services (FLFS) making significant contributions to profits.

FLA, the flagship subsidiary, registered a $3,6 million premium income and an underwriting surplus of $1,3 million for the period.

“The company continues to unlock value from land banks through land development initiatives,” Tembo said.

Malawi-based Vanguard, Tembo said, was consolidating its position in the market amid high expectations as the country’s political environment normalised and a successful capital raising programme.

Vanguard recorded a premium income of $1,7 million, representing a 23 percent increase whilst profit for the period amounted to $0,9 million and after it acquired an 50 additional schemes in the period under review.

The unit was however, affected by devaluation of the Kwacha in May.

Other subsidiaries in the group performed in line with expectations except Fidelity Asset Management which recorded a $27 000 loss due to a negative performance of the Zimbabwe Stock Exchange as well as absence of meaningful surplus funds.

Tembo said the group will continue consolidating existing businesses as well as extracting value from land investments.

At the end of 2011, the group reported improved performance on most of its business units on the back of a growing demand for individual life insurance products.

Premium income went up 53 percent at the end of last year at $11,8 million compared to $7,7 million in 2010, Tembo said.

“Benefits, claims and expenses went up by 45 percent to $8,4 million from $5,8 million in 2010,” he said.

“The overall growth in growth in premiums of 53 percent and the lower claims and expenses growth of 45 percent and growth in non-insurance income led to an improvement in the group’s profit before tax from $3 million in 2010 to $9,4 million, an increase of 209 percent,” added Tembo.

Total comprehensive income for the year was $10,1 million, an increase of 200 percent from the 2010 figure of 43,3 million.

Fidelity registered a significant growth in premium income with employee benefits contributing $6,1 million of the total premium income of the company amounting to $7,1 million.

Individual life premiums, Tembo said, accounted for the difference of $1 million.

The life assurance unit’s profit before tax stood at $6,1 compared to $1,7 million in 2010.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.