Fidelity appoints Tamayi chair, approves share buyback

HARARE - Former Capital Bank chief executive Lawrence Tamayi has been appointed Fidelity Life Zimbabwe (Fidelity) chairperson.

He takes over from Solomon Tembo who resigned after serving as chairperson for 10 years.
Meanwhile, Fidelity shareholders approved a 10 percent share buyback.

The group’s managing director Simon Chapereka said the shares would be purchased from the open market and would be converted into an employee share option scheme.

“(We) will give competent employees a sense of identity with the company,” he told an annual general meeting on Thursday.

Chapereka added that the company was pursuing expansion plans in South Sudan.

“We are waiting on the peace talks so that conflicting sides reach an agreement. We are currently still in Juba,” he said.

In his trading update, Chapereka said the group’s individual life unit recorded a 27 percent growth in the four months to April 2014.

The funeral assurance division experienced a 13 percent growth while group performance was three percent above 2013’s.

Expenses were five percent lower. Underwriting was 20 percent above 2013. Investment income remained stagnant.

Chapereka said they did not expect any improvement in terms of the company’s equity performance, as the Zimbabwe Stock Exchange was depressed.

The group has floated a bond, the Fidelity Life bond, set to be closed by month end.

“We have experienced reasonable interest with investors asking for an extension to review the bond. We expect it will be oversubscribed,” said Chapereka.

In June last year, the group said it planned to merge its funeral and individual life assurance units as part of a strategy to streamline operations and contain costs.

Then, Chapereka said the move was targeted at rationalising business structures in line with international standards.

“This will result in rationalisation of licences, elimination of the duplication expenses, both administrative and marketing, and more focus on similar business under one roof,” he said.

“The business will be recapitalised to give it a competitive edge,” he said.

The group realised a $2,5 million profit after tax in 2013 down from $4 million recorded prior year.

During the year, total income declined by 10 percent to $24,5 million from $27,2 million in 2012 while claims increased by 28 percent to $2,1 million.

Commission expenses declined by 76 percent to $261 000.

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