Fidelity profits slump

HARARE - Fidelity Life Assurance Limited (Fidelity)'s profit  dropped 21 percent to $2,6 million in the half-year to June 2013 due to low uptake of insurance products.

The Zimbabwe Stock Exchange-listed insurance group posted a $3,3 million profit in prior comparable period.

Solomon Tembo, the group’s board chairperson said the reduction in profit was also as a result of land earmarked for development that was not revalued in 2013.

“Land that has been earmarked for development has not been revalued in 2013 whereas in 2012, such land was revalued as it was classified as investment property,” said Tembo.

Gross premium income was marginally up, three percent to $6,9 million in the first half of the year compared to $6,7 million in last year’s corresponding period.

The group achieved an underwriting surplus of $2,2 million, 50 percent lower than the $3,3 million achieved in June 2012.

The group’s flagship Fidelity Life Assurance recorded net premium income of $4,2 million compared to $3,6 million in the corresponding period.

During the period under review, Fidelity merged its assurance arm and the individual life business to rationalise costs and remove licence duplication.

The merged operation achieved a premium income of $1,2 million in the period under review, same as in 2012.

Fidelity’s Malawi-based Vanguard Life Assurance recorded a premium income of $1,3 million compared to $1,7 million in June 2012 and going forward the operation is expected to benefit from a more stable economy.

The asset management company enjoyed a turnaround in fortunes, from a loss of $27 000 last year to a profit of $212 695 this year while the micro-finance division was also in the black with a profit of $326 000 with no comparative figures given.

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