HARARE - Short-term insurer Nicoz Diamond (Nicoz) says it has completed the first phase of its Hatfield Diamond Villas cluster houses with the units now on the market for rental purposes.
Nicoz managing director Grace Muradzikwa recently told an analysts briefing in the capital that the second phase of the project was going to commence during the first half of the year.
“Diamond Villas Phase one saw the completion of 20 units, but sales were generally depressed so we secured tenants and rented out the units, we are getting a 10 percent yield from the arrangement,” she said.
Muradzikwa added that the units were completed during the year to December 2015 after the group invested about $4 million into the cluster home scheme.
However, she said the group was reducing its properties in compliance with the insurance regulator stipulations.
“Our property investments decreased from 60 percent to 52 percent because the Insurance and Pension Commission (Ipec) demands that we reduce expenses to properties, going forward, and place emphasis on fixed income securities which were up from 32 percent to 40 percent,” she said.
In 2015, Nicoz property occupancies remained above market average but rental collections remained a challenge due to liquidity constraints, according to Muradzikwa.
But during the period under review, the insurer’s total assets increased to $41,3 million from $30,8 million prior comparable period.
Meanwhile, Nicoz’s overall profitability slumped 23 percent despite a 38 percent growth in gross premium written attributed to tough economic conditions.
The domestic insurance business contributed 131 percent to profit before share of associate’s profit/losses, followed by the Malawi unit, United General Insurance (UGI), which contributed 58 percent, First Insurance of Uganda (Fico), contributed a negative 66 percent and the property companies contributed a negative 23 percent.
The group maintained its equity investments in Fico, Diamond General Insurance (DGI) of Zambia and UGI.
While UGI reported a “modest profit” for the period, Fico and Diamond Seguros reported losses.
“Although the share of loss of associates improved by 61 percent, their negative performance had a significant impact on the profit after tax recorded,” Muradzikwa said.
Nicoz’s balance sheet grew 34 percent during the period under review, with capital at $10,7 million — above the statutory requirement of $1,5 million. The insurer ended the year on cash resources of about $8,4 million.
Muradzikwa said the improvement in cash generated from operations emanated from strong focus on cash flow management with 51 percent of the cash stated attributable to local operations.
No dividend was declared for the year as the group felt it needed to build capital.